BRASILIA: Brazil’s economy expanded3.8% in 2024, central bank data showed on Monday, extending a streak of stronger-than-expected growth but losing momentum in recent months amid aggressive monetary tightening.
The annual result followed a seasonally adjusted 0.7% drop in the IBC-Br index in December from the previous month, while economists polled by Reuters had expected a 0.4% decline.
The index, which incorporates proxies for output in agriculture, industry, and services along with tax data on production, is considered a leading indicator of gross domestic product.
According to central bank data, economic activity was flat in the final quarter of last year compared to the previous one.
On a non-seasonally adjusted basis, the IBC-Br index rose 2.4% from December 2023.
Weak December data for retail sales, industrial output and the services sector had already signalled a downturn.
The central bank is closely monitoring the slowdown, saying it needs more time and data to confirm a sustained deceleration in Latin America’s largest economy as it seeks to rein in inflation, which ended 2024 at 4.8%, above the 3% target.
After launching a tightening cycle in September, policymakers hardened their stance with a second straight 100 basis-point rate hike in January, and signalled another increase of the same magnitude in March.
Brazil’s economy consistently surpassed forecasts throughout last year, fuelled by increased investment and robust consumer spending, supported by a tight labour market.
Official GDP data is due to be released on March 7.
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