Brazil's government statistics agency (IBGE) reported Wednesday that industrial production in the country fell 2.1 percent in January compared to December. January's production also reflected a 3.4 percent decline from January 2011.
A weak Brazilian manufacturing sector was blamed for Brazil's declining growth rate and out of the 27 industrial sectors that were surveyed, 14 reported contracting industrial activity in January, including the mining and automotive sector. Production of consumer goods inched 0.1 percent down in January; durable consumer goods fell 1.9 percent; and capital goods declined by 16 percent.
January's drop fueled speculation Wednesday that the Brazilian government may drop its benchmark interest rate from 10.5 percent to 10 percent in order to boost Brazil's economy without renewing inflation.