MercoPress. South Atlantic News Agency

Brazil economic activity falls 0.32% in the third quarter

Latam largest economy is a major exporter of commodities

Brazilian economic activity dipped in the third quarter despite a slight rise in September, according to central bank data on Thursday. The central bank's IBC-Br economic activity index fell 0.32% in the third quarter.

It rose by a slight 0.02% in September and a drop in August was revised lower, to a fall of 0.57% from a previously reported 0.53%.

Economists are worried that Brazil's economy is slowing more than expected as it feels the impact of global financial turmoil, with industrial production stagnant this year and inflation around six-year highs.

The IBC-Br is widely seen as a proxy for GDP data. Third quarter GDP figures are due on Dec. 6.

The Euro zone sovereign debt crisis has taken its toll on Brazil, weakening investor confidence around the world and weighing on demand for commodities.

Brazil is a major exporter of a number of raw materials, including soy, iron ore, beef and orange juice.

A dip in global demand for those materials weighs heavily on its economy.

Economists have been steadily lowering their forecasts for growth this year after a brisk expansion of 7.5% in 2010.

At the start of the year, forecasts ranged as high as 5% for 2011.

In contrast, economists in a weekly central bank survey released on Monday forecast 3.16% growth.

Those same analysts also see the IPCA inflation index rising 6.48% this year, just barely under the 6.5% government target ceiling.