Brazil GDP Posts Sharpest Contraction Since 1991


The Brazilian economy contracted 5.9 percent year-on-year in the last quarter of 2015 accelerating from a 4.5 percent fall in the previous period. It was the seventh consecutive quarter of contraction and the worst since 1991, as investment and consumption dropped sharply. Considering full 2015, GDP shrank 3.8 percent.

On the expenditure side, gross fixed capital formation fell 18.5 percent, household consumption dropped 6.8 percent and government expenditure declined 2.9 percent. Regarding external demand, exports of goods and services grew 12.6 percent, while imports of goods and services fell by 20.1 percent.

On the production side, the services sector fell 4.4 percent, as internal trade shrank 12.4 percent and transport, storage and postal services contracted 9 percent. Also output from other services (-4.4 percent), information services (-3 percent), administration, health and public education (-1.2 percent) and financial intermediation and insurance (-0.4 percent) contributed negatively to the GDP. The real estate activities showed no growth. The industrial sector went down 8 percent, as manufacturing industry dropped 12 percent. The construction and mining sectors also fell by 5.2 percent and 4.1 percent, respectively. Meanwhile, production of electricity and gas, water, sewage and urban sanitation expanded by 1.4 percent. In contrast, agriculture advanced 0.6 percent.

Considering full 2015, GDP shrank 3.8 percent,
the steepest contraction since 1991, compared to a 0.1 percent growth in 2014. Gross fixed capital formation fell 14.1 percent (-4.5 percent in 2014), mainly due to the fall in domestic production and imports of capital goods. Household consumption fell by 4 percent (+1.3 percent in 2014), due the deterioration of inflation indicators, interest rates, credit, employment and income. The government expenditure fell by 1 percent (+1.2 percent in 2014). Regarding the external sector, exports of goods and services grew 6.1 percent, boosted by oil, soybeans, steel products and iron ore; while imports of goods and services fell by 14.3 percent, mainly due to lower purchases of machinery and equipment, automobiles, oil and oil products, as well as transport and travel services.

GDP per capita retreated 4.6 percent following a 0.8 percent fall in the previous year.

Brazil GDP Posts Sharpest Contraction Since 1991


IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com
3/3/2016 1:22:46 PM