The Brazilian economy grew at its fastest pace in over a year and a half in November, reversing a three-month contraction, as a recovery in consumer spending helped Latin America’s largest economy shrug off a global slowdown. Yields on interest rate futures rose.
Seasonally adjusted economic activity climbed 1.15% in November from October, the fastest pace in 19 months, the central bank said in a report published on its website Monday.
The increase in economic activity ended three straight months of declines from August through October, the longest contraction since the one that followed the bankruptcy of Lehman Brothers Holdings Inc. in 2008.
Since August, President Dilma Rousseff’s administration has cut the benchmark interest rate three times, lowered taxes on consumer goods and eased curbs on credit to try to revive growth and protect Brazil from the European debt crisis.
The non-seasonally adjusted economic activity index rose 0.79% from a year earlier, the central bank said. The yield on the interest rate futures contract maturing in January 2013, the most traded in São Paulo Monday, rose two basis points, or 0.02 percentage point, to 10.03 percent in Brazil. The real appreciated 0.3% to 1.7817 per dollar.
Even so, the central bank is expected to continue to cut borrowing costs at its next two meetings, as “international jitters” following Standard & Poor’s decision last week to cut the ratings of nine Euro-region nations will weigh more heavily with policy makers than domestic data.
Brazil will grow 3.6% this year, according to an International Monetary Fund forecast, slower than Russia, China and India, the other so-called BRIC nations. China is also studying measures to shore up consumer spending in the face of a global slowdown, Commerce minister Chen Deming said this month.