April 3, 2018 / 12:59 PM / 22 days ago

UPDATE 1-Brazil industry expands in Feb at slowest pace in 5 months

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    By Bruno Federowski
    BRASILIA, April 3 (Reuters) - Brazil's industrial output
expanded in February at the slowest pace in five months,
underscoring an uneven pace of economic recovery in the first
quarter of the year.
    Production rose 2.8 percent from the year before, government
statistics agency IBGE said on Tuesday, far below the median 4.0
percent estimate in a Reuters survey of economists.            
    Only one of the 17 respondents in the poll, Haitong, had
predicted a smaller increase, a sign that there is still scope
for disappointment even after the economy emerged from its
deepest recession in decades.
    Record-low interest rates and slow inflation have boosted
consumer spending in Latin America's largest economies, but
companies are still grappling with idle capacity and heavy debt.
    This should keep the central bank on track to cut interest
rates in May to a new all-time low following an unexpected
dovish turn in its communication in the wake of stubbornly low
inflation. 
    A 16.8 percent increase in vehicle sales drove the bulk of
the industry's expansion in February, IBGE said. Meanwhile,
sales of televisions, sound systems and other entertainment
products soared 41.1 percent as consumers rushed to the stores
ahead of the World Cup in June.
    Industrial output rose 0.2 percent from January, reversing
the previous month's contraction but undershooting a 0.55
percent consensus estimate for the second month in a row.
          

 (Reporting by Bruno Federowski; Editing by Bernadette Baum)
  
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