Brazil's economic activity starts Q4 on weaker footing

BRASILIA, Dec 15 (Reuters) - ⁠Brazil's economy ⁠started ‍the fourth quarter on a weaker footing, central bank data showed on Monday, as ‍analysts closely monitor activity indicators to calibrate their ​bets on when a monetary easing cycle might start.

The ​IBC-Br economic activity index, a proxy for gross domestic product (GDP), fell 0.2% in October from the previous month, undershooting the forecast ​of 0.1% growth from economists polled by Reuters.

Based on central bank estimates for agriculture, industry ​and services, along with production-related taxes, the index would have contracted 0.3% ‌month on month without support from a 3.1% expansion in the farm sector, the ​only positive contribution in the ⁠period.

On a non-seasonally adjusted basis, the index rose 2.5% in the 12 months ‌through October.

The central bank last week held its benchmark interest rate at 15% for a fourth consecutive meeting, ‌maintaining a hawkish stance and reiterating the need to keep rates ‌unchanged for a prolonged period to bring inflation back to its 3% target.

While policymakers offered no guidance on when ‍rate cuts might begin, economists expect easing to start in the first quarter ⁠of next year, with most forecasting an initial move in March, though many see scope for a cut as early as January.

(Reporting by Marcela Ayres; Editing by Sharon Singleton, Kirsten Donovan)

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