The economic news has been poor in Brazil for a while now, and with the release of new GDP figures the country is officially in recession, the BBC reports:
Brazil has entered recession after official figures showed the country’s economy contracted by 1.9% between April and June compared with the previous three months.
Analysts had expected a contraction, but the number was worse than expected.
First quarter output was also revised down to show a 0.7%, rather than a 0.2%, contraction.
Other problematic numbers include:
High interest rates – currently 14.25% – have also affected consumer spending, an important element of Brazil’s economy, while this year, the government has introduced stringent austerity measures designed to tackle high levels of debt.
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In the second quarter, household spending fell by 2.1% compared with the previous three months. The biggest falls came in the industrial sector, where construction output fell 8.4%
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Unemployment has risen rapidly, while inflation over 12 months is running above 9% – twice the government’s target.
And the problems in China are likely to make thing worse, given that China is a major customer for Brazilian commodities.
