After two months of contraction, the Brazilian economy remained stable in May. According to the metric from the Central Bank (IBC-Br), the activity had a modest rise of 0.03% in May compared with April, when it had shrunk 0.88% (revised from 0.84%), in the seasonally adjusted series.
May result was below the estimated by analysts. The average forecast suggested a high of 0.1% in May.
In the 12 months ending in May, the IBC-Br shows a decrease of 1.68% in the adjusted series and fall of 1.72% in the observed data. Due to the constant indicator reviews, the IBC-Br measured in 12 months is more stable than the monthly measurement, like the Gross Domestic Product (GDP). In the year, the IBC-Br decreased 2.78% without adjustment and 2.64% without adjustment for seasonality. Compared to May 2014, the activity shows contraction of 4.75% without adjustment and 3.08% in the adjusted data.
The Central Bank (BC) continues to add to its data the new methodology adopted by the Brazilian Institute of Geography and Statistics (IBGE). Thus, revisions are made steadily in the historical series. Data for December 2014 went from 0.97% to 0.95% contraction. In February, the growth was 0.71% instead of 0.7%; in March, there was a decrease of 1.53% instead of 1.51%.
Although it is known as “the BC GDP”, the IBC-Br has different calculation methodology from the official GDP calculated by IBGE. The IBC-Br takes into consideration the estimated production for the three sectors plus tax. But the GDP calculated by the IBGE is the sum of all goods and services produced in the country for a certain period.
In the June Inflation Report, the central bank projected a fall in GDP of 1.1% in 2015. Analysts consulted for making the Focus bulletin estimated contraction of 1.5%.
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