‘Preview’ of Central Bank GDP indicates expansion of 3.3% in the economy in February, the highest in 33 months

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The Central Bank’s Economic Activity Index (IBC-BR), considered the “preview” of the Gross Domestic Product (GDP), registered a strong expansion of 3.32% in February, compared to January, the institution said this Friday. (29). The result was calculated after seasonal adjustment, a type of “offset” to compare different periods. The result shows stability in the indicator at the beginning of 2023. This was the biggest growth in the indicator since June 2020 – when an increase of 4.86% was recorded. With that, it was the highest increase in 33 months, according to the historical series of the Central Bank. In comparison with February of last year, informed the Central Bank, the indicator of the level of activity registered growth of 2.76%. In the accumulated result for the first two months of this year, the IBC-Br increased by 2.87% and, in twelve months through February, increased by 3.08%. In this case, the index was calculated without seasonal adjustment. The GDP is the sum of all goods and services produced in the country and serves to measure the evolution of the economy. The BC’s IBC-Br is an index created to try to anticipate the GDP result, but the results were not always close to the official data released by the IBGE (see the difference below). Activity level In 2022, the economy grew 2.9%, which represents a slowdown compared to the 5% expansion recorded in the previous year. For this year, the financial market estimates a rise of 0.96% for GDP. For 2024, the expectation is for a smaller growth, of 1.41%. If the GDP grows, it means that the economy is doing well and producing more. If GDP drops, it means the economy is shrinking. That is, consumption and total investment is lower. Not always, however, the increase in GDP is equivalent to social well-being. GDP x IBC-Br The GDP calculation, released by the IBGE, and the IBC-Br is a little different – ​​the BC indicator incorporates estimates for agriculture, industry and the service sector, in addition to taxes, but does not consider the demand side (incorporated in the IBGE GDP calculation). The IBC-Br is one of the tools used by the BC to define the country’s basic interest rate. With lower economic growth, for example, theoretically there would be less inflationary pressure. In March, the rate was maintained at 13.75% per annum, the highest level in over six years, in an attempt to contain price increases.

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