Brazil's industrial output rebounds in August, despite rate pressures

SAO PAULO, Oct 3 (Reuters) -

Brazil's industrial production beat expectations in August, data from statistics agency IBGE showed on Friday, despite the continuous pressure of tight monetary policy.

After four months of mostly negative results, output in Latin America's largest economy grew 0.8% in August from July, IBGE said, above the 0.3% expected by economists polled by Reuters.

The low base of comparison from previous months was a key factor behind August's expansion, IBGE research manager Andre Macedo said in a statement.

Three of the four major economic categories surveyed reported an increase in production, according to IBGE.

Despite signs of modest recovery in August, the outlook remains fragile, Andres Abadia, chief Latin America economist at Pantheon Macroeconomics, said in a note.

Brazil's economy has been showing signs of a slowdown, following the central bank's aggressive monetary tightening aimed at curbing persistent inflation.

At its latest meeting, the central bank kept the country's benchmark interest

rate steady

at a near two-decade high, and signaled it would keep rates unchanged for a long time.

"Risks remain tilted to the downside. High interest rates - the Selic stands at 15%, the highest since 2006 - and subdued demand continue to weigh on momentum," Abadia said.

On a yearly basis, industrial production in August fell 0.7%. Economists in the Reuters poll expected a 0.8% drop. (Reporting by Isabel Teles; Editing by Andrea Ricci)