Brazil’s industrial sector growth in July was 0.5%, compared to June. That was the fifth consecutive month of growth. Cumulative growth for the first seven months of the year was 7.8%; compared to the same period in 2003, growth was 9.6%. And for the last 12 months, growth was 5%.
According to the government statistical bureau (IBGE), the numbers show strong performance in durable goods, especially vehicles, equipment and machinery (which are sensitive to wages), and in the export sector.
Silvio Salles, an economist at the IBGE, says that the market expects an increase in the country’s basic interest rate next week.
“Such an increase will be based on the fact that prices are rising. It may be considered a reason for concern,” he said.
Just last month, the Federation of Industries of Rio de Janeiro (Firjan) expressed its opinion that maintaining the annualized benchmark interest rate (Selic) at 16% can have adverse consequences for economic growth.
The organization recognizes that the decision by the Central Bank’s Monetary Policy Committee (Copom) reflects a concern over next year’s trend in inflation, but it considers that “keeping interest rates at high levels for a long period of time tends to sap the vigor of the country’s current resumption of economic growth.”
The Firjan once again called for measures to stimulate productive investment as a way to reduce the costs of the Central Bank’s current policy.