according to data disclosure On February 11 by the Central Bank, the Index of Economic Activity (IBC-Br) registered a rise of 4.5% last year. This is an earlier indicator of the development of GDP.
Compared to November last year, the index increased by 0.33% in December. However, it was less than market expectations, which rose 0.5% in the last month of 2021.
The 4.5% result for 2021 was lower than that stipulated by the government, which had forecast 5.1% growth in GDP. However, the research is consistent with a review of data by the Institute for Applied Economic Research (Ipea).
What is the Economic Activity Index?
The Central Bank’s Economic Activity Index aims to measure the current development of a country’s economic activity. Among the main functions of the IBC-Br are the following:
- Directing inflation control.
- Impact on the definition of the base interest rate for Economie;
- Estimated GDP in the financial market.
For this, the indicator takes into account the volume of industrial, agricultural and service production, which are the three main economic sectors of the country. Manufacturing tax is also included in the calculation.
The difference between this and GDP is the calculation based on the production of sectors of the economy. On the other hand, GDP is a balance between supply and demand for that output.
For this year, Ipea’s GDP growth forecast has been revised from 1.8% to 1.1%. The change was affected by high inflation, which hampered the purchasing power of families.
Despite this, the institute notes that Auxílio Brasil can positively affect GDP, as well as increase investments in infrastructure. Forecasts may change throughout this year, mainly due to Covid-19, which is causing uncertainty in the global economy.
You can check the views provided by the Ministry of Economy through here.
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