BRASILIA - Economic activity in Brazil resumed growth in February, but at a slower than expected pace, data released by the central bank showed on Monday.

The IBC-Br economic activity index, a leading indicator of gross domestic product, rose 0.34% in February from the previous month, below a 0.5% increase expected by economists, according to a Reuters poll.

On the other hand, the central bank revised the January drop to 0.73%, better than the 0.99% contraction reported earlier.

In February, retail sales and industrial output beat forecasts, while the performance of the services sector came in below expectations.

Persistent inflation and double-digit interest rates are expected to weigh on Latin America's largest economy this year. The government, however, has argued a stronger labor market and higher private investments will support more robust growth.

The IBC-Br index was up 0.66% on a non-seasonally adjusted basis from February 2021, while in the 12 months through February the index rose 4.82%, the central bank said.

The Economy Ministry lowered its GDP growth forecast to 1.5% this year from 2.1% previously, but the figure is still much higher than projections by most analysts.

(Reporting by Marcela Ayres, Editing by Mark Potter)