Brazil Economic Activity Slows Down as Government Handouts Wane

Brazil’s economic activity slowed in November, as the government pared back emergency cash handouts to informal workers amid the coronavirus pandemic.

The economic activity index, which is a proxy for gross domestic product, rose 0.59% compared to the previous month, the central bank reported on Monday. From a year ago, activity dropped 0.83%.

Brazil Economic Activity Slows Down as Government Handouts Wane

The central bank is widely expected to hold its interest rate at a record low of 2% on Wednesday amid growth headwinds in Latin America’s largest economy. In September, the government halved monthly stipends that had supported demand before eliminating them completely last month. Still, a recent surge in inflation is expected to lead to higher borrowing costs going forward.

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