Mixed signals on economic activity

 IBC-Br points to a modest acceleration in economic activity in May, but the outlook remains weak for the rest of the year. In May, the IBC-Br—a monthly proxy for Brazil’s GDP compiled by the Central Bank (while official GDP figures are published quarterly by the Brazilian Institute of Geography and Statistics, IBGE)—rose 0.1% m/m (market: -0.1%; Rabobank: -0.1%; Apr-25: 0.4%; May-25: -0.66%).  Retail sales point to a possible slowdown in the sector, driven by food inflation. In May, core retail sales (CRS) increased by 0.1% m/m (market: 0.5%; Rabobank: 0.8%; Apr-26: -1.6%; May-25: -0.3%), representing annual growth of 0.4% y/y (market: 1.2%; Rabobank: 1.6%; Apr-26: 1.0%; May-25: 1.8%). The broad retail sales index (BRS) — which includes