May 3, 2018 / 1:23 PM / 18 days ago

UPDATE 1-Brazil industry underwhelms for a third month in March

 (Recasts throughout with details, context)
    By Bruno Federowski
    BRASILIA, May 3 (Reuters) - Industrial output in Brazil
contracted unexpectedly in March, the latest in a string of weak
data suggesting a recovery in Latin America's largest economy
hit a bump in the first quarter.
    Production fell 0.1 percent from February, government
statistics agency IBGE said on Thursday, compared to a consensus
estimate of a 0.6 percent increase in a Reuters survey of
economists.           
    The figures mark the third straight month of
weaker-than-expected output from Brazilian industry, which had
previously led the economy's rebound from its deepest recession
in decades.
    Intermediate goods, a broad category including everything
from iron ore and oil to fertilizers and accounts for 60 percent
of output, dropped 0.7 percent from the month before.
    "Intermediate goods are directly related to the dynamics of
domestic demand. When there's less demand for basic materials,
that category suffers and weighs on the indicator as a whole,"
IBGE economist André Macedo said.
    Output rose 1.3 percent from a year earlier, below the
median 3.3 percent consensus estimate and even the lowest
forecast in the poll, which was 2.5 percent.             
    A slow and uneven economic recovery is likely to keep the
central bank on track to cut interest rates by an additional 25
basis points this month to an all-time low of 6.25 percent as it
struggles to lift inflation back to its target range.
            

 (Reporting by Bruno Federowski)
  
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