Brazil economic activity up

Brazil's economic activity increased by 0.3 percent in August compared to the previous month, according to a central bank index released on Friday, aligning with the average prediction from a Reuters survey of economists. The IBC-Br index, an indicator of gross domestic product, is calculated using the bank's projections for agriculture, industry, and services, as well as taxes associated with production.

The month's growth was primarily fueled by industry, which expanded by 0.9 percent compared to July. On an unadjusted basis, the index rose by 1.2 percent from a year ago and increased by 1.6 percent over the 12-month period leading up to August. The central bank has emphasized that a slower economic pace is necessary for inflation to reach its 3 percent target.

The bank predicts that Brazil's GDP will grow by 1.8 percent this year, with a projected deceleration to 1.4 percent in 2027. Monetary policymakers are scheduled to convene in early November to discuss their next fiscal decision following a series of five consecutive 25 basis point interest rate reductions, which have brought the benchmark Selic rate to 13.75 percent.