The Brazilian central bank said its IBC-Br economic activity index, a gauge of activity in farming, manufacturing and services, fell a seasonally adjusted 0.02 percent from April.

The median estimate in a Reuters survey of seven analysts was for a contraction of 0.5 percent in May. Forecasts for the fall ranged from 0.2 percent to 0.9 percent.

The number came a day after the central bank policymakers chopped interest rates for the eighth straight meeting to an all-time low of 8 percent. Still, this monetary stimulus, combined with targeted tax breaks and credit incentives to industries and consumers, has yet to reignite Brazil's fading boom.

Shrinking industrial output and surprisingly weak retail sales were both responsible for the economic stagnation in May, underscoring the view that the world's sixth largest economy is set for its worst annual performance since 2009.

Brazil's economic activity rose 1.09 percent from the same period a year earlier, without considering seasonal factors.

Activity in April was revised down to a rise of 0.10 percent from a previously reported 0.22 percent gain, while March's figures were revised up to a 0.17 percent fall from a 0.61 percent slide.

For the first quarter, economic activity was revised to a 0.54 percent gain, versus the fourth quarter, from a previously reported 0.49 percent rise.