Brazilian economic activity index likely to have stabilised in August

The Brazilian economy has been gradually coming out of its recession lately. But the monthly economic activity figures, which are a proxy for the behaviour of GDP, have not been in line with a sustained rebound, noted Wells Fargo in a research report. The economic activity index of Brazil for the month of August is expected to show some stability.

The year-on-year figure for the July month was 1.4 percent while the month-on-month print was also positive, up 0.4 percent. That is, a repetition of July’s performance with both the year-on-year and the monthly figure would assist in cementing expectations of a sustained rebound for the Brazilian economy.

“Still, we are not expecting the economy to recover at a fast pace even after two years of dismal economic activity. The political crisis in the country is still lingering and a full recovery will take a relatively long time”, added Wells Fargo.

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