Brazil's economy ends 2016 with disappointing performance

Thursday, February 16, 2017

Brazil's economic activity as measured by the IBC-Br index - a GDP proxy - showed a 0.26% contraction in December compared to the previous month.

According to the central bank, the comparison was made already discounting the seasonal differences between the periods analyzed.

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Analysts consulted by both Reuters and Broadcast Projections had predicted a 0.20% contraction for the month.

Compared to December 2015, there was a 1.82% decline, slightly worse than the forecast from analysts consulted by Broadcast Projections, who expected a 1.80% decrease.

The troubled economy also shrank in the fourth quarter, by 0.36% compared to Q3 and by 3.13% over 4Q15.

Economic activity was down 4.55% in 2016 as a whole, discounting seasonal differences. Without taking those differences into account, the contraction was 4.34%, a bit better than the 4.40% decline that analysts consulted by Broadcast Projections expected.

This was the second consecutive year that Brazil registered a record economic decline and a deepening recession, although the country is expected to pull out of its economic crisis, starting slowly in this year's first quarter.

Analysts consulted in the central bank's latest weekly forecast survey project a 0.48% GDP expansion this year and growth of 2.30% in 2018.