Brazil GDP Shrinks The Least In 2 Years In Q1

The Brazilian economy contracted 0.4 percent year-on-year in the first three months of 2017, following a 2.5 percent drop in the previous period and better than market expectations of a 0.5 percent fall. It is the 12th straight quarter of contraction but at the slowest pace in 2 years as the drag from consumer spending and investment was smaller.

Consumer spending (-1.9 percent from -2.9 percent in Q4) and gross fixed capital formation (-3.7 percent from -5.4 percent) fell less. In contrast, public expenditure went down at a faster 1.3 percent (-0.1 percent in Q4) as the government of Michel Temer reduced fiscal spending. Exports went up 1.9 percent, following a 7.6 percent slump in Q1 as sales rose for oil, iron ore and soybeans. After declining for two years, imports jumped 9.8 percent, the most since the third quarter of 2013.

On a quarterly basis, the economy advanced 1 percent following a downwardly revised 0.5 percent drop in the previous period and in line with market expectations. It is the first expansion in 2 years, boosted by a jump in exports and a smaller drag from consumer spending.

Joana Taborda |
6/1/2017 2:17:12 PM