Brazil industrial output steadies in September
Brazilian industrial output was flat in September compared with August, cutting short a six-month upward trend, but it rose 7.6 percent from a year ago as the country rebounds from a recession, official data showed on Wednesday.
Economists said September's unchanged output level was better than the 0.2 percent fall expected due to production constraints as most industrial sectors are working close to capacity.
They said the central bank would probably welcome the halt in the surge in industrial production, which if continued unchecked, could pressure inflation higher.
"There is a certain stabilization at a fairly high level. It's not bad at all, I'd even say it is positive as it shows some deceleration that the central bank has been trying to produce," said Marcelo Carvalho, chief economist with ING bank in Sao Paulo.
Economists said that stabilization would not affect their forecasts for economic and industrial growth this year. They expect Brazil's gross domestic product to rise over 4.5 percent after last year's 0.2 percent drop.
"As for industrial production, we expect it to grow 8 percent this year and this stabilization is not changing our forecast," said Guilherme da Nobrega, chief economist with Itau.
"This number is a bit stronger than the market expected and should reinforce the central bank's case of more rate hikes. Our call is that there'll be two more 50 basis point rises this year, and I think the data backs up that call," he added.
BROAD-BASED GROWTH THIS YEAR
The government's Brazilian Institute for Geography and Statistics (IBGE), which released the industrial output figures, said that in the first nine months of the year, industrial production rose a cumulative 9 percent from the same period a year earlier.August was the 13th straight month of industrial output growth compared to year-ago levels.
(From Reuters, November 10, 2004)
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