BRASILIA, March 16 (Reuters) - Brazil's IBC-Br economic

activity index for January came in slightly below market

expectations, central bank data showed on Monday, ahead of a

closely watched interest rate decision later this week.

BY THE NUMBERS

* The index, seen as a proxy for gross domestic product

(GDP), rose a seasonally adjusted 0.80% in January from the

previous month.

* Economists polled by Reuters had expected a 0.85%

increase.

* The expansion was the strongest in a year, driven by

the services sector - the largest component of Brazil's economy.

* In 12 months, the non-seasonally adjusted index rose

2.3%.

ADDITIONAL CONTEXT

* The central bank has signaled it will start a rate-cut

cycle at its March 17-18 meeting.

* The benchmark Selic rate has been held at 15%, the

highest in nearly two decades, since July last year.

* Oil price shocks and renewed inflationary pressure

following the U.S.-Israel conflict with Iran have led markets to

scale back expectations for the first rate cut to 25 basis

points, from the 50-basis-point move anticipated since last

year.