Brazilian industrial output contracted for a second straight month in April
Brazil’s industrial output unexpectedly contracted for a second straight month in April even as the government steps up measures to boost economic growth.
Output fell 0.2% in April after dropping 0.5% in March the national statistics agency IBEG said on Thursday in Rio de Janeiro. Output declined 2.9% from a year ago.
On Wednesday the central bank reduced the benchmark Selic interest rate to a record low 8.5% in an attempt to revive growth that is recovering slower than the government initially anticipated.
Finance Minister Guido Mantega said that the recent weakening of the Real, the worst performing major currency this year, will help protect local manufacturers from foreign competition. The Brazilian currency is down 7.1% against the US dollar since the beginning of the year.
Last week the government eased reserve requirements to free as much as 18 billion Reais for lenders to grant automobile loans. Mantega also cut taxes to reduce car prices by as much as 10% and trimmed a levy on consumer goods.
Factory output in April fell in 13 of 27 sectors, led by a 3.7% drop in the food industry. Production of capital goods, a barometer of investment, rose 1.9%.