Brazil Output Rises

Brazilian industrial output has begun to show signs of recovery, rising by 3.2% year on year in December, the highest surge in four months and double market forecasts. The increase in production may temper the Central Bank’s approach to interest rate reductions, say economists. The Bank has recently begun to look at bigger cuts to the still-high benchmark rate, currently at 17.25%. The government has revised initial output estimates for October and November to 0.4% and 1.3% year on year growth from 0.1% and 0.6%, respectively, showing better-than-expected growth. Overall in 2005, production was up 3.1%.