SAO PAULO Ė Brazilís Central Bank said on Wednesday that Brazilian economic activity fell 0.68 percent in the first quarter of 2019 relative to the previous three months, a reading that raises further concern about a cooling economy.
The Index of Economic Activity (IBC-Br), which is used as a preview of the gross domestic product (GDP) number, contracted by 0.28 percent in March compared to February.
Brazilís official growth figure corresponding to the first quarter of 2019 will be released on May 30 by the state-run Brazilian Institute of Geography and Statistics (IBGE).
Brazilís economic performance in the first three months of the year had already been reflected in some indicators the IBGE had released in recent days.
The services sector declined by 1.7 percent in the first quarter, while industrial production fell 2.2 percent during that same three-month period.
Retail sales, meanwhile, inched up 0.3 percent.
Economy Minister Paulo Guedes acknowledged Tuesday that the economy had hit rock bottom and said the governmentís 2019 GDP forecast will be lowered to 1.5 percent, down from 2.2 percent a month ago.
Economists also have lowered their projections for Brazilian growth this year, predicting GDP will rise just 1.45 percent in 2019 before picking up steam in 2020 and expanding 2.5 percent.
The markets are eying potential passage of pension reform, a measure that rightist President Jair Bolsonaro says is a crucial step in lowering a high budget deficit and getting the economy back on track.
Brazilís economy, which contracted by roughly 7 percent during a deep 2015-2016 recession, grew 1.1 percent in 2017 and then expanded at that same clip in 2018.
Bolsonaro has warned of an economic collapse in the coming years if Brazilís Congress does not pass pension reform.
Under Brazilís current system, employees are eligible to retire with a full pension if they meet the minimum age requirement (65 for men and 60 for women) or if they have contributed to social security for a certain number of years (35 in the case of men and 30 for women).
Bolsonaroís plan, which encompasses both the public and private sectors, would keep the minimum retirement age for men at 65 but raise it to 62 in the case of women.
However, individuals would no longer be eligible to receive a pension based on years of contributions if they are below the minimum age. Under current rules, it is common for Brazilians in their 50s to retire with a full pension.
Bolsonaro, whose plan is expected to be watered down in Congress, said in unveiling the pension overhaul plan in February that it would save the country around 1.07 trillion reais ($268 billion) over 10 years.
Because a pension overhaul would amend Brazilís constitution, it requires three-fifths of the votes in both houses of Congress.
Under Bolsonaroís plan, the current pension system would be replaced in 10 years by a privatized ďindividual capitalizationĒ system that is similar to one that Chile has used since the 1980s.