LatinNews Daily - 18 July 2023

* Brazil’s central bank (BCB) has released the economic activity index (IBC-Br) used as a proxy to anticipate GDP figures. The index showed a 2.0% drop in economic activity from April to May, following a rise in activity from March to April (+0.56%). The index for May this year saw an increase of 2.15% compared to May 2022. The accumulated economic activity over the 12 months to May 2023 registered an annual growth of 3.43%. Speaking to the press about the economic slowdown, Brazil’s finance minister, Fernando Haddad, said that this was just “as expected” due to a prolonged period of high interest rates. Since President Luiz Inácio Lula da Silva’s government took office in January, the president and his ministers have repeatedly criticised the BCB for keeping the benchmark interest rate (Selic) so high – currently maintained at 13.75%. The slowdown in economic activity is likely to fuel the continued calls for the bank to lower the Selic in its next monetary policy committee meeting, scheduled for 1-2 August.