Brazil Economy Contracts 2.5% YoY In Q4


The Brazilian economy shrank 2.5 percent year-on-year in the fourth quarter of 2016, following a a 2.9 percent fall in the previous period and worse than market expectations of a 2.3 percent drop. It was the eleventh straight quarter of contraction, mainly due to sharp declines in both household consumption and fixed investment.

From the expenditure side, fixed investment dropped 5.4 percent (-8.4 percent in Q3), household consumption fell 2.9 percent (-3.4 percent in Q3) and government spending declined 0.1 percent (-0.8 percent in Q3). Also, net external demand contributed negatively, as exports decreased sharply by 7.6 percent (0.2 percent in Q3) and imports went down at a slower 1.1 percent percent (-6.8 percent in Q3).

From the production side, the service industries decreased by 2.4 percent following a 2.2 percent fall in Q3, as output declined for: trade (-3.5 percent from -4.4 percent); transport and storage (-7.5 percent from -7.4 percent); information services (-3 percent from -1.5 percent); financial services (-3.4 percent from -3.3 percent); and public health, education and social security (-0.7 percent from 0.1 percent). Industrial output decreased by 2.4 percent (-2.9 percent in Q3), as output contracted for: manufacturing (-2.4 percent from -3.5 percent); and construction (-7.5 percent from -4.9 percent); while growth was recorded in electricity, gas, steam and air conditioning supply (2.4 percent from 4.3 percent) and mining (4 percent from -1.3 percent). Agriculture fell 5 percent after shrinking by 6 percent in Q3.

On a quarterly basis, the economy shrank 0.9 percent, worse than a 0.7 percent contraction in the previous period. 

In 2016 as a whole, the GDP fell 3.6 percent, following a 3.8 percent decline in 2015.

Brazil Economy Contracts 2.5% YoY In Q4


IBGE | Joana Ferreira | joana.ferreira@tradingeconomics.com
3/7/2017 12:25:53 PM