Brazil's industrial output beats expectations in March

SAO PAULO, May 7 (Reuters) - Brazil's industrial production increased in March from the previous month, official data showed on Wednesday, beating analyst expectations.

Industrial output in Latin America's largest economy rose 1.2% in March from February, the biggest rate of increase since June 2024, government statistics agency IBGE said. Economists polled by Reuters expected 0.3% growth.

Production rose 3.1% for the full year, more than double the 1.4% expected in the Reuters poll.

In March, three out of the four major economic categories surveyed registered an expansion, according to IBGE.

Durable consumer goods and semi-durable and non-durable consumer goods showed the most strength, following declines recorded in the previous month.

"The explanation for this month's result lies in the combination of months without significant growth plus important sectors recovering losses from previous months," IBGE survey manager Andre Macedo said in a statement.

Despite the strong performance in March, Brazil's industrial production shows a weakening trend, Pantheon Macroeconomics said.

"Sky-high interest rates, weakening domestic demand and less supportive global growth continue to weigh on activity. The near-term outlook remains difficult," Chief Economist Andres Abadia said in a note to clients.

Later on Wednesday, Brazil's central bank rate-setting committee, known as Copom, is set to announce its latest monetary policy decision. The expectation is for a 50-basis-point rise to 14.75%, the highest level in almost 20 years.