Brazil’s industrial production recorded aslightly up in June thanks to a boost derived from extractive activitiesthus exceeding analysts’ estimates despite the drag of double-digit borrowing costs in the economy.
The production increased 0.1% compared to the previous month, versus the median estimate of economists surveyed by Bloomberg, of -0.1%. In the year-on-year comparison, the industry grew by 0.3%, the Brazilian Institute of Geography and Statistics (IBGE) reported on Tuesday.
Monetary policy makers are ready to start a monetary easing cycle this week and start cutting the Selic reference rate from 13.75%.
The credit crunch caused by high rates has infuriated President Luiz Inácio Lula da Silva, who sees them as a major obstacle to growth. While the economy started the year on a solid footing, more recent data showed that activity contracted more than expected in May.