Brazil’s industrial production increased more than economists forecast in January, a sign that the world’s second-biggest emerging market may be responding to government stimulus measures. Swap rates rose.
Industrial output increased 2.5 percent after contracting 0.05 percent in December, the national statistics agency said today in Rio de Janeiro. The rise was the biggest since March, 2010. Economists had forecast output would jump 1.6 percent from the previous month, according to the median forecast from 42 analysts surveyed by Bloomberg. Production rose 5.7 percent from the year before, compared with a median estimate of 4.6 percent from 36 economists.
President Dilma Rousseff has labored to persuade companies in Latin America’s biggest market to invest after growth last year was the slowest among major economies in the region. The government cut industrial power rates as much as 32 percent to boost competitiveness, and officials traveled last week to New York and London to interest private investors in Brazil’s $235 billion infrastructure program. Yesterday the central bank kept the benchmark rate at a record low 7.25 percent for the third straight meeting.
Swap rates on the contract maturing in January 2014, the most traded in Sao Paulo today, rose eight basis points, or 0.08 percentage point, to 7.75 percent at 9:11 a.m. local time. The real strengthened 0.2 percent to 1.9658 per U.S. dollar.
Capital goods output in January rose 8.2 percent and durable goods rose 2.5 percent, the agency said, as 18 out of 27 industrial groups registered growth.
Brazil’s economy grew 0.9 percent last year, less than the U.S. and peers in the BRIC group that includes Russia, India and China, as industrial output fell 2.7 percent. Economists in the most recent survey by the central bank forecast growth of 3.09 percent this year and 3.65 percent in 2014.
Investments rose in the fourth quarter by 0.5 percent after four straight quarters of declines. For the entire year, investment contracted 4 percent and totaled 18.1 percent of gross domestic product, down from 19.3 percent in 2011.
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