The Economic Activity Index (IBC-Br), which acts as a preview of the official gross domestic product (GDP), indicated that the largest economy in Latin America shrank by 0.28 percent in March from a month ago, while the accumulated 12-month period saw a growth of 1.05 percent.
The report also said that Brazilian economy grew by 0.23 percent year-on-year during the first quarter of 2019.
The IBC-Br acts as a preview to the statistical results from the Brazilian Institute of Geography and Statistics (IBGE) which will be released on May 30.
If IBGE confirms the decline released by the Central Bank, it will be the first negative result since the fourth quarter of 2016, when Brazil's economy declined 0.6 percent.
Brazilian Economy Minister Paulo Guedes said on Tuesday the government rivised down its GDP growth projection for 2019 to 1.5 percent.