Brazilian industrial output posted its first annual increase in more than a year in October as a tax break on autos helped support a nascent recovery in the country’s beleaguered manufacturing sector.
Output from Brazilian factories and mines expanded 2.3 percent in October from a year earlier, government statistics agency IBGE said on Tuesday, though less than the 2.5 percent rise forecast in a Reuters poll of 33 analysts. Industrial production dropped 3.6 percent on a year-over-year basis in September, IBGE said, revised from a 3.8 percent drop.
“There is a gradual recovery happening,” said Jankiel Santos, chief economist with BES Investimento in Sao Paulo. “Bit by bit we are getting more signals of it and today’s numbers confirm it.”
Output at Brazil’s mines and factories slowed in August, falling a seasonally adjusted 0.2% from July as production in the country’s industrial sector suffered the impact of cheap imports and the sluggish global economy.
However industrial production rose 1.8% in August compared to the same month a year ago, the Brazilian Census Bureau, or IBGE, said this week. In the rolling 12-month period, industrial production climbed 2.3% in August versus a rise of 2.9% in the 12-months through July.
Brazil’s manufacturing sector has showed signs of decelerating activity since June, undermined by a strong Real that had stoked imports of cheaper goods. The Brazilian Central Bank also attempted to tamp down domestic demand by implementing five consecutive interest rate hikes after prices started to spiral out of control.
Charles Newbery, Nacha Cattan and Daniel Horch – iMarketNews, 05/30/2011
Brazil’s President Dilma Rousseff faces political problems as she fights to prevent her chief of staff and market favorite Antonio Palocci from facing a formal congressional investigation, which could paralyze Congress and embarrass the government.
The opposition accuses Palocci of influence peddling, as he charged millions for consulting services to companies while running Rousseff’s presidential election campaign, and of involvement in illegal financing for that campaign.
As the opposition began to collect signatures to establish the inquiry commission, members of the governing coalition and Rousseff’s own PT party threatened to sign it.