“Brazil’s industrial production in January fell the most in more than three years, reinforcing bets that the central bank may accelerate today the pace of interest- rate cuts to shore up economic growth.
Output fell 2.1 percent from the previous month, more than twice the median estimate of a 0.8 percent decline from 45 analysts surveyed by Bloomberg. For the year, production fell 3.4 percent, the national statistics agency said in Rio de Janeiro today.
President Dilma Rousseff’s administration is using stimulus measures including interest ratecuts, tax reductions and looser bank lending requirements to boost growth. Traders are split on whether the central bank will cut the benchmark interest rate by 50 or 75 basis points today, according to Bloomberg estimates based on interest rate futures. Policy makers have cut the rate by 50 basis points at each of their last four meetings to 10.50 percent.
The 6 percent rise in the real against the dollar this year has made imports cheaper and exports more expensive, undermining the international competitiveness of Brazilian manufacturers.
The situation is “alarming,” the National Industry Confederation said on March 6, after the statistics agency announced gross domestic product figures showing industrial output fell 0.5 percent in the fourth quarter from the previous three months.
The currency declined 0.2 percent to 1.7610 per dollar at 9.16 a.m. Brasilia time….”
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