Rio de Janeiro – Brazil’s Gross Domestic Product (GDP) was down 1.9% in the second quarter of 2015 from the first one, the Brazilian Institute of Geography and Statistics (IBGE) has reported this Friday (28th). The indicator shows that the sum of all wealth produced in the country from April to June was R$ 1.428 billion. The quarter-on-quarter GDP shrinkage was the highest since quarter one, 2009. This was the fifth straight three-month period where the Brazilian economy showed no growth.
In the first six months of 2015, the economy slowed down at a 2.1% rate, the IBGE said. In the second quarter of 2015, the GDP was 2.6% smaller than in quarter two of last year.
The IBGE National Accounts coordinator Rebeca de La Rocque Palis said economic activities suffered across the board. "The GDP is a summarized measurement the economy. Virtually every economic indicator has deteriorated,” she added. According to Palis, "the political turmoil underway and poor economic indicators are weighing down on practically all of the economic activities.”
Industry activity plummeted the most, by 4.3% from the comparable year-ago period. Agriculture was down 2.7% and services slowed by 0.7%. Government consumption increased by 0.7%.
Goods and services exports rose 3.4% in quarter two from quarter one, and imports dropped 8.8%. Families’ consumption-related spending was down 2.1% from the preceding quarter.
Within industry, civil construction struggled the most, and posted a 8.4% decline from quarter one. Processing industry activity decreased 3.7%. Construction and processing make up 75% of Brazil’s industrial output.
In services, retail was down 3.3%, transportation, storage and mail services were down 2%, and information services dropped 1.3%. Administration, healthcare and public education services showed the highest increase at 1.9%.
Year-on-year in quarter two, agriculture was the only sector to see growth, at 1.8%. The IBGE said good performance by some of the products harvested in the second quarter and crop productivity fuelled results. Year-on-year, production increased 11.9% for soy, 5.2% for corn and 4.4% for rice. Coffee and beans output declined 2.2% and 4.1%, respectively.
Industry slowed down 5.2% year-on-year, driven by processing, which was down 8.3%. The services sector was down 1.4% and retail and wholesale fell 7.2%.
The year-on-year export-import performance was influenced by a weakening of Brazil’s currency the real, which dropped 38% in quarter two this year from quarter two, 2014. Goods and services exports went up 7.5%, while imports declined 11.7%.
Spending on consumption by families decreased 2.7% year-on-year in quarter two due to factors like inflation, interest rates, credit, employment and income.
*Translated by Gabriel Pomerancblum
