UPDATE 1-Brazil's economic activity rises slightly in August
(Recasts, adds background)
BRASILIA Oct 16 (Reuters) - Economic activity in Brazil barely rose in August after a sharp rebound the previous month, suggesting the economy is struggling to recover from a recession which began earlier this year.
The Brazilian central bank's IBC-Br economic activity index rose 0.27 percent in August from July in seasonally adjusted terms, the bank said on Thursday.
The median estimate in a Reuters survey of 26 analysts was for a 0.3 percent increase.
The Brazilian economy plunged into recession in the first half of the year as a slump in investments and public holidays during the World Cup tournament hurt activity in Latin America's largest economy.
The sluggish economy has been a key topic in a combative campaign that pits President Dilma Rousseff and centrist senator Aecio Neves in the closest presidential race in two decades.
Rousseff has blamed the slowdown on a weak world economy and said activity would gradually recover in the remainder of the year, but low confidence levels continue to hurt businesses.
The IBC-Br index, a gauge of activity in the farming, industry and services sectors, dropped a non-seasonally adjusted 1.35 percent over the same month a year ago. (Reporting by Silvio Cascione; Editing by Bernadette Baum)
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