UPDATE 1-Brazil's industry shrinks at fastest pace in 6 years in October
(Adds table, details, background) By Silvio Cascione BRASILIA, Dec 3 (Reuters) - Brazilian industrial output fell at its fastest annual rate in more than 6 years in October, contracting by 11.2 percent and adding to evidence that a deep recession in Latin America's largest economy has yet to reach bottom. On a monthly basis, industrial production fell a seasonally-adjusted 0.7 percent in October from September , its fifth straight monthly contraction, government statistics agency IBGE said on Thursday. That was worse than the median forecast of a decline of 0.2 percent in a Reuters poll. Brazil's industrial output has fallen to 2009 levels as the economy sinks into one of its worst recessions on record. About 1.4 million people have lost their jobs in the past year, reducing consumer demand for manufactured goods. Output dropped in 15 of 24 industrial segments on a monthly basis, with a steep fall in oil derivatives production weighing most heavily on the broader index. Higher activity in processed food industries helped limit the decline, IBGE said. Production of durable consumer goods fell 5.6 percent in October from September. Demand for many big-ticket items, such as cars and home appliances, has been affected by tighter credit conditions after the central bank raised interest rates to a nine-year-high of 14.25 percent to curb inflation. Brazil's economy has tanked because of political gridlock complicating government efforts to shore up finances, massive interest rate hikes to curb inflation, and China's economic slowdown which has slashed demand for Brazilian raw materials. The economy is widely expected to shrink between 3 and 4 percent this year and about 2 percent in 2016 - the longest downturn for the South American country since the 1930s. Industrial output is forecast to plunge 7.5 percent this year and 2.3 percent in 2016, according to a weekly central bank survey of economists. (Percent change) Oct'15/Se Oct'15/Oct p'15 '14 Capital goods -1.9 -32.6 Intermediate goods -0.7 -7.5 Consumer goods -0.6 -12.3 Durable consumer goods -5.6 -28.7 Semi-durable and -0.6 -7.4 non-durable consumer goods Industrial output -0.7 -11.2 (Reporting by Silvio Cascione; Editing by Mark Heinrich)
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