* IBC-Br drops 0.31 pct in November from October
* Weak economy defies central bank's push against inflation
By Silvio Cascione
BRASILIA, Jan 17 Economic activity in Brazil
contracted more than expected in November despite a surge in
retail sales, throwing cold water on hopes of a modest recovery
from a third quarter slump.
The Brazilian central bank's IBC-Br economic activity index
declined 0.31 percent in November from October in
seasonally adjusted terms, the bank said on Friday. The median
estimate in a Reuters survey was for a decline of 0.1 percent.
Brazil's faltering economy raises the stakes for
policymakers, who have been struggling to tame stubbornly high
The central bank lifted its benchmark lending rate earlier
this week for a seventh straight time, but hinted it could soon
slow or even halt the rate hikes to avoid further damage to
Brazil's economy, which has stagnated over the past few
years despite a string of government stimulus, contracted in the
third quarter for the first time in four years as rising prices
and dwindling business confidence weighed on investment
Robust retail sales growth in November had fueled hopes of
an uptick in economic activity for a second straight month. The
improvement in commerce, however, was not strong enough to
offset a small decline in industrial output.
The IBC-Br index, a gauge of activity in the farming,
industry and services sectors, rose a non-seasonally adjusted
1.34 percent over the same month a year ago.