Brazil’s economy looks strong in Q2 as June activity beats Reuters forecasts

BRASILIA (Reuters) – Brazil’s economy ended the second quarter showing resilience after much stronger-than-expected activity data in June, central bank figures showed on Friday, bolstering forecasts for a solid year.

The IBC-Br index, a key predictor of gross domestic product (GDP), rose a seasonally adjusted 1.4 percent from the previous month, beating the 0.5 percent rise expected by economists in a Reuters poll.

The monthly performance led to a 1.1% expansion in the second quarter compared to the previous three months.

Finance Minister Fernando Haddad said this week that the government is likely to revise this year’s economic growth forecast upward to above 2.5 percent, after keeping the estimate at that level in July.

Latin America’s largest economy was supported by a strong labor market and a booming services sector, which hit an all-time high in June.

Second-quarter performance showed resilience despite severe flooding that hit the southernmost state of Rio Grande do Sul in May, devastating cities and displacing more than half a million people. These events have led many economists to predict potential economic losses for the country.

Official gross domestic product (GDP) figures will be published by the IBGE statistics agency on September 3.