A Brazilian industrial production registered a drop of 0.7 percent in August compared to the previous month, reported the Brazilian Institute of Geography and Statistics (IBGE) this Tuesday.
Compared to the same month of the previous year, production fell 0.7 percent. Market expectations were for a drop of 0.3 percent in the monthly variation and stability on an annual basis. In August there was a decrease in the production of Capital Goods (-0.8%) and Durable Consumer Goods (-3.4%). The result made the quarter ended in August close with a drop of 1.2%.
According to André Perfect, Chief Economist at Necton Investimentos, the fall in industrial production has to do with macro and micro economic aspects. On the macro side, it is related to the weaker outlook for the economy as a whole and higher interest rates. And on the micro side, it is linked with the deterioration of the economic fabric and the disarticulation of production chains due to the pandemic has been a strong limiting factor for industrial activity.
After the industrial production data, Perfeito believes that GDP for the 3rd quarter should come very close to zero and that this will result in a new round of GDP revisions for the year. Despite forecasts, Necton maintained its GDP forecast in 2021 at 5% and next year at around 1.8%.