UPDATE 1-Brazil growth accelerates to more than three-year high in Q2
SAO PAULO, Aug 30 (Reuters) - Brazil's economy grew at the fastest pace in more than three years in the second quarter, beating analysts' expectations as a slew of stimulus measures spurred investment and industrial output.
Brazil's gross domestic product grew 1.5 percent from the first quarter, statistics agency IBGE said on Friday. Economists had forecast 0.9 percent growth.
The pick-up, more than doubling the pace of growth recorded in the first three months of the year, contrasts with slower second-quarter growth in emerging market peers such as India and China, while Mexico's economy contracted.
The report suggested that Brazil made significant progress in an economic recovery that has taken much longer than expected due to infrastructure bottlenecks and stubbornly high inflation.
Nevertheless, measures of confidence and job growth have deteriorated since June after massive street protests, suggesting a sharp slowdown is likely in the third quarter.
Investments as measured by gross capital expenditure rose for a third straight quarter, gaining 3.6 percent from the previous one. Industrial output expanded 2.0 percent, while household consumption, one of Brazil's main growth engines over the past decade, edged up 0.3 percent.
With Brazil's economy stuck in low gear since President Dilma Rousseff took office in 2011, her government offered tens of billions of dollars in stimulus measures such as tax breaks and subsidized credit lines.
The central bank also kept interest rates at record lows for nearly one year until starting a rate tightening cycle in April.