Weekly Report - 04 October 2012 (WR-12-39)

BRAZIL| Industrial production shows important recovery in August. Data from Brazil’s national statistics institute (Ibge), released on 2 October, showed that industrial production in the country in August increased by 1.5% when compared with July, the highest expansion in the last 15 months. Ibge pointed out that with the August result, Brazil’s industrial production has posted three consecutive months of increases, following a 0.3% increase in May and a 0.5% increase in July. This means that the industrial production rate accumulated a 2.3% increase in the last three months, which almost made up for the cumulative 2.8% decrease recorded between February and April. Yet in annualised terms, August’s production rate was 2.0% lower than the in the same period of 2011. As Ibge pointed out, “the domestic industrial production in August continued the downward trajectory that began in October 2010 (when it accumulated a 11.8% year-on-year increase) and registered its worst negative result since January 2010 (when it accumulated a 5% year-on-year contraction)”. More encouragingly, Igbe points out that its August data showed that 20 of the 27 manufacturing sectors exhibited a positive performance compared with the previous month, led by a 3.3% increase in the automobile manufacturing sector, thanks in large part to the recent tax breaks introduced by the Dilma Rousseff government.

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