Industrial production still shows no signs of reaction

BRAZIL ECONOMICS - Report 14 Jan 2019 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

Acceleration of the cyclical recovery will require expansion of gross fixed capital formation, leading to a better labor market and thus faster growth of household consumption. Although there are some favorable conditions, such as the low real interest rate and reduced indebtedness of companies, industry is still operating with high idle capacity, limiting fixed capital investments. In November industrial output only grew by 0.1%, flashing a warning light about the behavior of GDP in the last quarter of 2018. Back in the third quarter, GDP grew by 0.8%, but this result – unquestionably positive – was largely due to a combination of a “base effect” (the second-quarter result was depressed by the trucker’s strike) and a temporary impulse to household consumption from funds released from PIS/PASEP accounts.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2024 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.