Brazil's recession only gets worse

Wednesday, November 30, 2016

Brazil's economy contracted 0.8% in the third quarter, its seventh straight sequential decline.

Capital Economics cited the one-off effects of a poor agricultural harvest and temporary production disruptions in the auto sector, but emphasized persistent weakness in consumer spending.

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The average forecast from 20 consultancies and financial institutions polled by Valor Data was a decline of 0.9%. Projections ranged from -0.50% to -1.1%.

In the year-on-year comparison, GDP fell 2.9%, its tenth straight contraction, as the country is experiencing its worst recession in decades.

The current value of Q3 GDP reached 1.58tn reais (US$466bn), according to data from statistics bureau IBGE.

Capital Economics downwardly revised its 2016 growth projection for the country to -3.5% (from -3.0%) and to 1.0% (from 1.5%) in 2017.