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By Jamie McGeever
BRASILIA, June 3 (Reuters) - Industrial production in Brazil fell at its fastest pace on record in April due to the COVID-19 pandemic, official figures showed on Wednesday, although the decline was not as severe as economists had expected.
Output fell 18.8% in April from March and 27.2% from the same month a year ago, both by far the steepest declines since the IBGE series began in 2002.
The median estimates in a Reuters poll of economists projected a monthly fall of 29.2% and an annual decline of 33.1%.
That means industrial production in Latin America’s largest economy is now down 38% from the peak in May 2011, according to Alberto Ramos, head of Latin American research at Goldman Sachs in New York.
April’s data suggests industrial production will again weigh heavily on Brazil’s overall economic performance in the second quarter. The 1.4% fall in the January-March period was the steepest quarterly decline since 2015.
“The fall was not as calamitous as feared, but it still highlights that GDP will fall dramatically in Q2, perhaps by 10-12%,” said William Jackson, chief emerging markets economist at Capital Economics, adding that it also gives the central bank room with to cut interest rates again later this month.
The social isolation and lockdown measures across much of Brazil hammered industrial activity in April. Production of capital goods fell 41.5% from the previous month, durable goods fell 79.6%, and consumer goods 26.1%, IBGE said.
“March had already shown a negative result and we saw that spread in April, with double-digit falls of historic magnitudes in all economic categories and in 22 of the 26 activities surveyed,” IBGE research director Andre Macedo said.
Among the 26 sectors surveyed, the biggest decline was in motor vehicles, trailers and parts, where production plunged 88.5% on the month, IBGE said. (Reporting by Jamie McGeever; Editing by Andrea Ricci and Steve Orlofsky)