SAO PAULO (Reuters) – Industrial production in Brazil fell more than expected in April from March, data from government statistics agency IBGE showed on Friday, underscoring the industry’s difficulties against a backdrop of high borrowing costs.
Output slipped 0.6% in the period, more than the 0.2% decline forecast by economists in a Reuters poll, with the data keeping the sector below pre-pandemic levels and likely increasing pressure on the central bank to start cutting rates .
IBGE highlighted that production fell in three of the first four months of , with April being the worst 25 of 13 regions posted negative data.
“We haven’t seen such widespread negative results since October 2022,” Research Manager Andre Macedo said, noting that the food sector was the biggest drag in April as it declined for the fourth straight month.
Data on Thursday already showed that industrial activity was one of the bright spots in Brazil’s first-quarter growth, which was higher than expected, with a surge in agricultural output offsetting a 0.1% contraction.
Industrial FIESP Group blamed weak results on tight monetary conditions, with Brazil’s benchmark interest rate at a six-year high 13. 25% Since September 25, the industry is expected to continue to struggle amid difficulties accessing credit.
Compared to the previous year, output fell 2.7% in April, also below market expectations for a 1.1% decline, according to IBGE. , Andres Abadia (Andres Abadia) pointed out that the latest data increased the “case for a rate cut soon.”