Brazilian Economy Contracts 1.7%

The GDP in Brazil shrank 1.7 percent on quarter in the three months to September of 2015, worse than market expectations. It is the third contraction in a row as investment shrank for the ninth straight quarter and household spending posted the third consecutive fall.

Gross fixed capital formation slumped 4 percent, following a 6.6 percent fall in the second quarter and household consumption decreased 1.5 percent (-2.4 percent in Q2). Exports fell 1.8 percent after rising in the previous two periods and imports went down 6.9 percent (-8 percent in Q). In contrast, government expenditure grew for the second straight quarter, up 0.3 percent, following a 0.7 percent gain in the previous period. 

On the production side, manufacturing recorded the sharpest drop (-3.1 percent), followed by internal trade (-2.4 percent) and agriculture (-2.4 percent). The mining sector edged down 0.2 percent and construction fell 0.5 percent while the output for utilities rebounded 1 percent. 

Figures for the second quarter were revised to show the economy contracted at a faster 2.1 percent, compared to earlier estimates of a 1.9 percent fall.

Year-on-year, the GDP went down 4.5 percent in the third quarter of 2015. Considering the firts nine months of the year, the economy shrank 3.2 percent, the biggest fall ever.

Brazilian Economy Contracts 1.7%

Joana Taborda |
12/1/2015 12:02:36 PM