Kenneth Rapoza – Forbes, 04/16/2012
t’s no wonder the Brazilian government announced another round of stimulus packages for the country’s industrial sector this month, year over year growth in Brazil is near zero.
According to the Central Bank, February GDP data from the IBC-Br monthly figures showed the economy contracting by 0.23% month over month (seasonally adjusted). From February 2011, this big emerging market is up just 0.86%. Ihe IBC-Br is the index of monthly economic activity from the Central Bank, and the monthly GDP proxy is now been below trend for the seventh straight month.
No breakdown by activities is available for this index, but Nomura Securities’ managing director in New York, Tony Volpon, said he believes falling industrial production is the prime suspect behind the poor growth. While consumer demand remains robust, evidenced by strong retail sales growth so far this year (Jan: 7.8% y-o-y, Feb: 9.6% y-o-y), industrial production is running negative, at -3.9% y-o-y as of February. The production of capital goods, in particular, shrank 16% y-o-y, a figure last seen during the height of the financial crisis.