LatinNews Daily - 22 May 2023

In brief: Quarterly rise in Brazil’s economic activity

* Brazil’s central bank (BCB) has released the latest economic activity index (IBC-Br), which is used to anticipate GDP figures. An increase of 2.41% was registered for Q1 2023 compared to Q4 2022, despite a slight monthly decrease (-0.15%) from February to March this year. The economic activity for March 2023 saw a year-on-year increase of 5.46%, and Q1 2023 saw an increase of 3.87% compared to the same period in 2022. The latest figures bring the accumulated economic activity over the 12 months to March to 3.31%. Brazil’s government has repeatedly slammed the BCB for maintaining high interest rates, highlighting the potential constraints on economic activity. In a recent interview with CNN Brasil, Finance Minister Fernando Haddad stated that it is not a question of whether to lower the benchmark interest rate, but of when to lower it. Haddad went on to suggest that the BCB’s inflation targeting should be open to re-evaluation, stating that a calendar-based target to be reached by the end of the year “does not make the least bit of sense”, calling for a “continuous target” instead.

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