The economy shrank 0.40% in October compared to the previous month, according to the Central Bank’s IBC-Br (economic activity indicator), released this Wednesday (15th).
The retreat was stronger than the 0.20% forecast by analysts in a Reuters survey.
This is the fourth fall in a row, according to the latest revised data. The indicator signals a setback in the recovery of the productive sector this year and reinforces the thesis of weaker activity for 2022.
In September, activity dropped 0.46% and in August, 0.44%. The data may differ from those previously reported as the series undergoes frequent revisions.
Last month, the monetary authority reported a drop of 0.27% in September and 0.29% in August.
The adjustments are usually residual, but, according to BC, in recent months the difference has been greater due to the shocks caused by the Covid-19 pandemic.
In the latest changes, past data got worse, with bigger falls than previously released and smaller growths.
In July, for example, there was a drop of 0.11% after this month’s adjustment. The indicator for the period increased from 0.60% (before the adjustment) to 0.23% in the first revision (in October) and then to 0.18% (in November).
In the 12-month period, the productive sector grew 4.19%. In the year, the increase is 4.99%.
In March of this year, a month marked by new rounds of lockdowns due to the worsening of the Covid-19 pandemic, the economy shrank 1.88%.
According to this month’s review, the data was only positive in four months of this year, January (0.45%), February (1.63%), April (0.45%) and June (0.07%) .
The number is calculated with seasonal adjustment, which removes specifics from a month, such as number of working days, to facilitate comparison with other periods.
After the start of the pandemic, the closing of businesses and social distance affected the economy. With the reopening and relaxation of the restrictive measures, activity started to recover.
In March of last year, when the virus arrived in the country, there was a reduction of 5.90% in the productive sector, as reported at the time, already under the effect of social distancing. After the last review, the variation dropped to 4.95%.
The worst result was registered in April 2020, when the economy fell 9.73% (10.12% with revision), the lowest level since October 2006 and the biggest drop between one month and another in the entire historical series, which started in 2003.
The IBC-Br measures the country’s economic activity and has been released since March 2010. It was created to assist in monetary policy decisions, as there is no other monthly data on the productive sector’s performance.
The BC indicator takes into account the performance of the main sectors of the economy: industry, agriculture and services.
with Reuters
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