Economy.- Brazil’s GDP fell 0.1% in the third quarter, weighed down by the drought

08-15-2012 Combine harvester in a wheat field ECONOMY ZARAGOZA ARAGÓN SPAIN EUROPE GOVERNMENT OF ARAGÓN


During the third quarter of the year, Brazil’s Gross Domestic Product (GDP) registered a contraction of 0.1% compared to the previous quarter, accumulating two consecutive quarters of negative variations in the quarterly rate.

Among the effects that explain the downturn in the economy between July and September are the drought that is currently hitting the South American country, which has adversely affected the primary sector and exports.

Specifically, the agricultural sector in Brazil contracted by 8%, while the industry did not register variation. On the other hand, services and family consumption grew by 1.1% and 0.9%, respectively.

According to data published this Thursday by the Brazilian Institute of Geography and Statistics (Ibge, in year-on-year terms, the main economy of Latin America experienced growth of 4%, while so far this year the economy has grown by 5.7 %.

The new macroeconomic data add a new adverse element to the already complicated economic situation in the country. Currently, unemployment stands at levels of around 12%, inflation is at a five-year high and the Central Bank has embarked on a path of rate hikes to reach 7.75%.

In this sense, activity is losing momentum in Brazil despite the lifting of restrictions due to the coronavirus and a greatly extended vaccination campaign.

Additionally, analysts surveyed by the Central Bank have lowered their GDP projections over the past two months as questions about Brazil’s fiscal trajectory grow. They now forecast economic growth to slow to less than 0.6% next year, compared to the 4.8% rebound expected in 2021.

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