Industrial production in Brazil is barely growing; And a warning of an economic slowdown

Bloomberg – Brazil’s industrial production grew less than expected in October, while the previous month’s reading was revised down amid the central bank’s warning that Latin America’s largest economy will slow in the coming months.

Production increased by only 0.1% compared to the previous month. Below the average estimate of analysts surveyed Bloomberg0.4%. The September reading was revised from 0.1% higher to unchanged. In a year-on-year comparison, the industry expanded by 1.2%, the Brazilian Institute of Geography and Statistics (IBGE) reported on Friday.

Brazilian sectors that rely on credit, such as manufacturing, have been paralyzed this year, as financing remains out of reach for many companies. These problems come on top of long-standing challenges, such as bureaucracy and a confusing tax system.. While the overall economy has exceeded expectations, central bankers warn of a slowdown in activity in the future due to tight monetary policy.

With annual inflation falling toward target and activity slowing, the central bank said it would continue to seek a half-point cut in interest rates. Monetary policymakers have cut borrowing costs by 150 basis points since August.

Read more at bloomberg.com