Brazil’s economic activity in May declined less than analysts expected, signaling that interest- rate cuts and stimulus measures may be having some effect in offsetting the impact of the global crisis.
The seasonally adjusted economic activity index, a proxy for gross domestic product, fell 0.02 percent in May, after rising a revised 0.10 percent in April, the central bank said. Analysts expected a decline of 0.4 percent, according to the median estimate from 26 economists surveyed by Bloomberg. The non-seasonally adjusted index rose 1.09 percent from a year ago, the biggest increase in four months and also more than expected by 24 economists surveyed by Bloomberg, whose median estimate was for a 0.25 percent increase.
Forecasts for economic growth in the biggest emerging market after China have fallen nine straight weeks to 2.01 percent, according to the latest central bank survey, even as the government has lowered borrowing costs, cut taxes and boosted lending by the state development bank. The central bank has cut the benchmark Selic rate by 4.5 percentage points since August to a record low 8 percent.
Retail sales in May fell the most in more than three years, while industrial output declined for a third month and 3.3 percent from a year before.
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