Brazil's Industrial Output Falls as Oil Products Decline
Brazil's industrial output fell in June as oil products declined due to high interest rates and weakened demand. The Brazilian statistics agency, IBGE, reported a 1.8% monthly decline in industrial production from May, with declines in 16 of the 25 surveyed sectors.
The petroleum sector accounted for roughly 14-15% of Brazil's industrial structure and saw its second consecutive monthly decline. The output of refined petroleum products fell 5.9%, leading the downturn among industrial sectors.
IBGE manager André Macedo said that while it was not yet possible to identify a direct impact from the Middle East conflict on the decline in refined petroleum output, there is a clearer connection in the chemical products sector, which saw a 4.3% drop in June and had been affected by the war.
Experts attributed the decline to high interest rates, elevated inventories, and the unwinding of the Middle East conflict's impact on the oil and gas sector. Following the release, various institutions revised their forecasts for industrial production growth this year, with some predicting a modest 1.2% increase.