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* IBC-Br index up 0.40 pct, exceeding expectations
* But pace of growth unlikely to be maintained -economists
By Asher Levine
SAO PAULO, Jan 16 (Reuters) - Economic activity in Brazil expanded at a steady pace in November, but analysts cautioned the rate of expansion by Latin America's largest economy may not be maintained.
The central bank's IBC-Br economic activity index rose a stronger-than-expected seasonally adjusted 0.40 percent from the month before and 2.67 percent from November 2011, the bank said on Wednesday.
While the figure translates to an annualized growth rate of nearly 5 percent, economists cautioned that upcoming economic data are likely to disappoint.
"It was better than expected, but we don't think this rhythm will be maintained," said Flavio Serrano, senior economist with BES Investimento in Sao Paulo, who pointed to weakness in investment and industry due to a lack of confidence among businesses and high labor costs.
President Dilma Rousseff's government is scrambling to bolster an economy that analysts expect to have grown no more than 1 percent in 2012 by cutting taxes on dozens of sectors and handing out billions of dollars in subsidized lending.
Now some economists say even 1 percent growth may be a stretch.
The IBC-Br grew 0.52 percent in the three months ending in November from the three months prior. That was down from the 1.07 percent quarterly pace in the three months ending in October.
In comparison, the index grew 1.15 percent in the third quarter from the second, while Brazil's gross domestic product expanded just 0.6 percent in the period.
"The IBC-BR is pointing to a GDP number that shouldn't be much different than the third quarter's," said Luciano Rostagno, chief strategist with WestLB in Sao Paulo. "We will need 1 percent growth in the IBC-Br in December to end the year with 1 percent GDP growth."
The central bank has attempted to boost the economy by slashing rates to an all-time low of 7.25 percent and will likely keep them at that level when it meets later on Wednesday.
Yields on interest rate futures rose across the board following the IBC-BR data, suggesting traders saw a lower probability that the central bank would continue to cut interest rates to support growth.
So far, fiscal and monetary stimulus has yet to jolt the Brazilian economy out of its lull. Industrial production faltered in November due to a slowdown in automobile output and retail sales growth slowed as a heavier debt load weighed on consumer demand for big-ticket purchases.
"We thought the measures would take effect by now and that we would see more of a recovery, but the numbers are not in line with what was originally expected," Serrano said.
He said December's industrial production numbers were likely to disappoint.
The IBC-Br index, which economists closely watch to track Brazil's economy, had risen 0.40 percent in October, revised up on Wednesday from a previous reading of 0.36 percent. The index encompasses the services, agricultural and industrial sectors.
The median estimate in a Reuters survey of 15 analysts was for a monthly rise of 0.11 percent. Forecasts ranged from a drop of 0.40 percent to a rise of 0.60 percent.