Brazilian Economy Shrinks 0.5% QoQ in Q3

In the third quarter of 2013, Brazil’s GDP contracted a seasonally adjusted 0.5 percent quarter-on-quarter, first decline in two years. An increase in government and household spending was not enough to offset a drop in exports and investment.

On the production side, agriculture recorded the highest drop (-3.5 percent qoq), followed by the manufacturing sector (-0.4 percent qoq) and construction (-0.3 percent qoq). In contrast, mining advanced 2.9 percent and production of water, gas and electricity rose 0.9 percent. The services sector advanced a meager 0.1 percent qoq, hurt by a contraction in finance and insurance and real estate activities (-0.2 percent qoq, respectively). The retail sector showed no growth over the previous quarter.

On the expenditure side, only household and government consumption accelerated in the third quarter (1 percent and 1.2 percent respectively, from 0.3 percent and 0.5 percent respectively in the previous three-month period). In contrast, gross fixed capital formation recorded the largest drop (-2.2 percent), followed by exports (-1.4 percent) and imports (-0.1 percent). 

Year-on-year, the GDP expanded a weaker-than-expected 2.2 percent.   

Brazilian Economy Shrinks 0.5% QoQ in Q3

Joana Taborda |
12/4/2013 9:47:18 AM