Rio de Janeiro – Brazil’s Gross Domestic Product (GDP) contracted by 3.6% in 2016, the Brazilian Institute of Geography and Statistics (IBGE) reported this Tuesday (7) in Rio de Janeiro. In 2015, the economy had shrunk by 3.8%.
GDP reached BRL 6.3 trillion in 2016. The IBGE said 2015 and 2016 numbers combined represent the gravest recession since 1947. IBGE Regional Accounts coordinator Rebeca Palis explained that 2016 contraction was not the worst on record for a single year, but the economy had never slipped by 7.2% in a biennium.
“The magnitude of the decline, looking at the biennium, is the biggest since 1948,” she said, adding that record-keeping by the IBGE began in 1947. Therefore, data on year-on-year variations is only available from 1948 onwards.
“At other points in time, some economic activities kept the economy from sinking further. In this biennium, it was a widespread phenomenon, which is not very usual. Services were affected, which didn’t happen much in the past,” she said.
The two-year downturn brought GDP back to Q3 2010 levels, the IBGE reported. Q4 2016 saw GDP shrink by 0.9% from Q3, and by 2.5% from Q4 2015.
Agriculture
The sector of the economy that weathered the strongest blow was agriculture and livestock farming, down 6.6%. Industry activity dropped by 3.8%, with services going down 2.7%, according to the IBGE.
In Q4 from Q3 2016, activity was down 0.7% for industry and 0.8% for services. Agriculture and livestock was up 1% in this comparison.
Year-on-year in Q4, all sectors shrank, including a 5% decline in agriculture. Industry and services slumped by 2.4%.
Throughout 2016, the poor performance in agriculture and livestock came mostly as a result of agriculture. Industry was held back by a 5.2% decline in construction and a 2.9% drop in mineral extraction. Activity increased by 4.7% in electricity and gas, sewage and urban cleaning services.
Weighing down on services were a 6.3% drop in trade and a 3.1% drop in the ‘other services’ category. Real estate activity increased by 0.2%.
*Translated by Gabriel Pomerancblum