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Brazil's economy grew at its fastest pace since 2010 and its stocks are flying high

Factory workers in Brazil.
Ricardo Funari | Brazil Photos | LightRocket | Getty Images
Factory workers in Brazil.

Brazil's economy is showing signs it's climbing out of its two-year recession, and international investors are snatching up the country's stocks.

Economic activity in Latin America's largest country grew at its fastest pace since 2010, according to a central bank indicator. The IBC-Br index rose 1.31 percent in February, the bank said Monday, after an upwardly revised increase of 0.62 percent in the previous month.

"The economy will likely get to the end of this year with a meaningful growth rate," Finance Minister Henrique Meirelles said in Brasilia on Monday.

It's not just Brazilian officials who have high hopes for Brazil's economy this year, however.

Investors have also jumped on the bandwagon, pushing the iShares MSCI Brazil Capped ETF (EWZ) more than 11 percent higher this year, handily outperforming the S&P 500. The ETF rose more than 2 percent Monday and was on track to post its best session since March 15.

EWZ (blue) versus S&P 500 (green) in 2017

Source: FactSet

The Brazilian real is also rising against the U.S. dollar this year, advancing more than 4.5 percent. The currency also popped 1.3 percent Monday.

Brazil's most recent economic uptick comes at a time when the U.S. economy is showing signs of a slowdown.

The Labor Department said Friday that consumer prices fell 0.3 percent in March, marking the biggest drop since January 2015. Also Friday, the Commerce Department said retail sales dropped 0.2 percent last month, more than expected.

—CNBC's Gina Francolla and Reuters contributed to this report.