Brazil's industrial output beats expectations in January

SAO PAULO, March 6 (Reuters) - Industrial production in Brazil rose more than expected in January from December, government statistics agency IBGE said on Friday, despite high interest rates weighing on Latin America's largest economy.

* Production rose 1.8% in January, IBGE said.

* The median estimate in a Reuters poll projected a 0.7% increase.

* The result marked the sharpest climb since June 2024, following a strong decline the previous month.

* Output was up in all four main categories surveyed in January, according to IBGE.

* Compared to a year earlier, production in January grew 0.2%, while economists had expected a 0.7% drop. TIGHT FINANCIAL CONDITIONS

* While January's rebound partly offsets the weak end to the fourth quarter of 2025, the outlook remains cautious, warned Pantheon Macroeconomics' chief Latin America economist Andres Abadia.

* "Interest rate cuts this year, fiscal support ahead of elections, and potential gains from the EU-Mercosur agreement likely will provide some tailwinds, but investment weakness and political uncertainty keep risks tilted to the downside," he said.

* Brazil's central bank has maintained interest rates near a two-decade high of 15% in a bid to tame persistent inflation, signaling it could start easing in March. (Reporting by Isabel Teles; Editing by Aida Pelaez-Fernandez)