UPDATE 1-Brazil's economic activity drops 0.02 pct in July - central bank
(Adds details, forecasts for 2015 and 2016)
BRASILIA, Sept 21 (Reuters) - A gauge of economic activity in Brazil fell at a slower-than-expected pace in July, central bank data showed on Monday.
The Brazilian central bank's IBC-Br economic activity index fell a seasonally adjusted 0.02 percent in July from the prior month, the bank said. A Reuters survey of ten analysts forecast a 0.35 percent decline in the indicator, a gauge of activity in the farming, industry and services sectors.
Brazil's economy has slipped into its worst recession in 25 years, hit by high inflation, rising interest rates and a string of tax hikes and spending cuts by President Dilma Rousseff.
Economic activity fell 1.93 percent in the 12 months through July, according to the IBC-Br index. Over the same period a year before, activity slid 4.25 percent in July.
The IBC-Br index is an early indicator of gross domestic product data. IBGE, the country's statistics institute, will publish third-quarter economic activity results on Dec. 1.
According to a weekly central bank survey published on Monday, economists expect the Brazilian economy to shrink by 0.8 percent next year, following a sharp contraction of nearly 3 percent forecast for this year. (Reporting by Silvio Cascione; Editing by Jeffrey Benkoe)
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