Brazil's Q1 economic activity better than expected, says central bank

BRASILIA, May 27 (Xinhua) -- Brazil's economic activity performed better than expected in the first quarter of 2021, registering growth in four of the country's five regions, and a contraction only in the northern region, the Central Bank of Brazil said on Thursday.

According to the bank's Regional Bulletin, a quarterly publication on each region's foreign trade, employment, prices, production and sales, among other areas, Brazil's economic recovery shows signs of resilience and should see growth in the short term.

Among the factors driving growth are monetary stimulus, welfare payments for low-income households due to the COVID-19 health crisis, a low benchmark interest rate of 3.5 percent annually, and the waning pandemic.

"In the short term, the maintenance of monetary stimuli ... and the lessening impacts of the health crisis, even as a result of ongoing vaccination, should sustain the recovery at the national level," the report said.

The level of "uncertainty about the pace of this growth is still above normal, but little by little it should return to normal," it added.

During the first quarter of the year, the Brazilian economy as a whole evolved better than expected, despite a second wave of COVID-19 infections and the termination of pandemic welfare payments.

The report highlighted the importance of agribusiness and mining to sustaining economic growth at the regional level thanks to the high prices of raw materials.