July 14, 2020 / 1:18 PM / 25 days ago

Brazil's economy swings back to modest growth in May

SAO PAULO (Reuters) - Economic activity in Brazil began to grow again in monthly terms in May, after two sharp consecutive declines in March and April, as businesses slowly began to open up in the wake of coronavirus-related quarantining measures.

The central bank’s IBC-Br index, a leading indicator of gross domestic product, rose 1.31% in May from April. That was a marked improvement from the 9.7% slump in April.

Still, the modest rise is far from proof that Brazil’s economy is out of the woods. Economic activity was off some 14.24% from the same period last year, the bank said.

“The growth in real economic activity in May is due to the gradual relaxation of social distancing and measures to restrict activity and movement,” said Goldman Sachs economist Alberto Bernal.

“Although the pandemic still needs to be controlled, recent data and some metrics suggest activity hit bottom and reached an inflection point sometime in the middle of April.”

Reporting by Camila Moreira; Writing by Gram Slattery; Editing by Bernadette Baum

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