Industrial production in Brazil was unchanged in January from December, the statistics agency IBGE reported on March 11. The result was lower than market expectations and reflected a slowdown in the local economy. It followed three consecutive months of declines as the industry struggled with high interest rates, although the overall economy remained strong in 2024.

Brazil's industrial production rose 1.4% in January from a year earlier, but below the 2.3% increase expected by the market. Illustrative photo

Economists had forecast Brazil's industrial production in January would rise 0.5% from December, while in fact there was no change.

Manufacturing rose in three of the four major sectors surveyed by IBGE, with capital goods (physical assets used to produce other goods and services) rebounding after two months of decline. However, a decline in intermediate goods production dragged down the overall index.

Compared to the same period last year, Brazil's industrial production in January increased 1.4%, but lower than the 2.3% increase expected by the market.

" It's been a poor start to the year ," said Andres Abadia of Pantheon Macroeconomics, a macroeconomic research and consulting firm. " Brazil's industrial slowdown is likely to continue in the first quarter, as high interest rates, weak demand and slowing global growth weigh on economic activity ."

Brazil's benchmark interest rate is currently 13.25% and the Central Bank has planned to raise it by another 100 basis points at its meeting later this month to control rising inflation.

Still, Brazilian market policymakers are watching for signs of a slowdown but say it is too early to call a clear downward trend.