June 15, 2018 / 12:13 PM / 3 months ago

UPDATE 1-Brazil economic activity starts 2nd quarter on sunny note

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By Bruno Federowski

BRASILIA, June 15 (Reuters) - Economic activity in Brazil expanded slightly less than expected in April, showing steady growth at the start of the second quarter before a nationwide truckers’ strike set in.

The central bank’s economic activity index rose 0.46 percent from March, compared to the median 0.50 percent estimate in a Reuters poll of economists.

Despite concern about a slowdown, the figures are the latest suggestion of continued momentum for Brazil’s economic recovery after strong readings on retail sales and industrial output for the month.

Record-low interest rates and slow inflation have boosted consumers’ purchasing power, helping to drive a consumption-led bounceback.

However, truckers protesting high diesel prices blocked major highways in the final weeks of May and paralyzed major sectors of Latin America’s largest economy.

Several economists have cut their gross domestic product forecasts for 2018 following the strike, which cut into Brazilian exports in May.

The latest data is unlikely to keep the central bank from maintaining interest rates unchanged next week as double-digit unemployment rates keep a lid on price hikes despite inflationary pressures stemming from the protests. (Reporting by Bruno Federowski Editing by Chizu Nomiyama and Frances Kerry)

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