Economic activity is up 1.06% in August, says BC

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Brazilian economic activity increased in August, according to data released today (15) by the Central Bank (BC). It is the fourth consecutive month of growth, after the falls in the months of March and April, due to the social isolation measures necessary to face the covid-19 pandemic.

The Central Bank’s Economic Activity Index (IBC-Br), seasonally adjusted (adjusted for the period), expanded by 1.06% in August, compared to July. But in comparison with July 2019, there was a fall of 3.92% (without adjustment for the period, since the comparison is between equal months). In the 12 months ended in August, the indicator also fell by 3.09%. In the year, the IBC-Br was negative by 5.44%.

The IBC-Br is a way of assessing the evolution of Brazilian economic activity and helps the BC to make its decisions about the basic interest rate, the Selic. The index incorporates information on the level of activity of the three sectors of the economy: industry, trade and services and agriculture, in addition to the volume of taxes.

The indicator was created by the Central Bank to try to anticipate, by approximation, the evolution of economic activity. However, the official indicator is the Gross Domestic Product (GDP, the sum of goods and services produced in the country), calculated by the Brazilian Institute of Geography and Statistics (IBGE). For the financial market, GDP is expected to fall by 5.03% in 2020.

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