São Paulo – Brazil’s Gross Domestic Product (GDP) shrank by 0.8% in Q3 from Q2 as per seasonally adjusted figures. The result was made public by the Brazilian Institute of Geography and Statistics (IBGE) this Wednesday (30), and comes as the seventh quarter-on-quarter decline.
In Q3 from Q3 2015, GDP was down 2.9%, in the tenth straight year-on-year quarterly contraction. Over the past four quarters, GDP shrank by 4.4% from the immediately preceding period. Year-to-date through September, the Brazilian GDP was 4% smaller than in the comparable period of 2015, in the sharpest downturn for the period at hand since 1996, according to IBGE.
The Brazilian Ministry of Finance said in a statement that the main reason for the 0.8% contraction was high corporate indebtedness levels, which causes investment to slow down. “The scenario stemmed from conditions predating the government’s new economic agenda, and those conditions proved more serious than they seemed at first,” the statement reads.
The government has nonetheless stuck to its GDP forecasts for this year and the next: a 3.5% drop this year and 1% growth in 2017.
*Translated by Gabriel Pomerancblum
