Central Bank of Brazil IBC-Br Economic Activity

The Index of Economic Activity of the Central Bank of Brazil (IBC-Br) is an indicator developed as a preliminary for the Gross Domestic Product (GDP) of the country. In this sense, it is a thermometer for the economy, where the Central Bank of Brazil uses this index as a tool to define the basic interest rate (Selic Rate) of the Brazilian economy.

This index includes growth estimates for the agricultural, industrial and service sectors, considering the evolution of the total production supply, together with import products, and also the taxes approved by the government and the national congress.

IBC-Br and the Gross Domestic Product (GDP) are indicators that measure economic activity, where IBC-Br reflects the GDP slope, but not necessarily a forecast, since they present very significant differences in relation to their calculation methodologies. The differences between the two indicators are reflected in the final results.

IBC-Br reflects the behavior of the economic activity, guiding the policy of inflation control by the Monetary Policy Committee (COPOM). GDP is calculated by the Brazilian Institute of Geography and Statistics (IBGE) from the sum of the goods and services produced in Brazil. The higher the IBC-Br index, the better the economy of Brazil is, increasing the value of the Brazilian real.