Brazil GDP plummeted 9.7% in second quarter due to Covid-19
Loading player...
Brasília — Brazil’s economy registered the biggest drop on record in the second quarter as social isolation measures aimed at slowing the spread of the coronavirus paralysed activity from investments to family consumption.
GDP plunged 9.7% from the previous three-month period, more than the median estimate for a 9.2% tumble from analysts in a Bloomberg survey. From a year ago, Brazil’s economy contracted by 11.4%, the national statistics agency reported on Tuesday. Both drops were the biggest of a series going back to 1996.
The figures reflect a period when an explosion in Covid-19 cases turned Latin America’s largest economy into a global virus hot-spot and prompted a mishmash of lockdown measures across the country. Since then, President Jair Bolsonaro’s administration has spent billions of dollars on stimulus including monthly stipends and employment subsidies.
The move has put Brazil’s economy on better footing than its neighbours and prompted analysts to pare their 2020 recession calls.
Despite the record plunge, the Brazilian economy fared better than its Latin American peers in the second quarter: Chile’s GDP fell 14.1% from the same period a year ago, while Mexico’s shrank 18.7% and Peru’s plummeted 30.2%.
The economy ministry attributed Brazil’s superior economic performance to emergency measures that limited the deterioration of the job market. “However, for the recovery to be consistent, it’s key to maintain the agenda of structural reforms and fiscal consolidation,” it said in a statement.
In the second quarter, investments dived by 15.4% from January-March, while family consumption collapsed by 12.5%, the statistics agency reported. On the other hand, agriculture rose by 0.4% on the back of soy and coffee.
There are signs that government spending and the rollback of social-distancing policies helped segments such as retail sales recover towards the end of the quarter. Bolsonaro said on Tuesday that he would extend stipends for informal workers to the end of the year, cutting the amount paid by half.
Brazil has recorded more than 3.9-million coronavirus infections and more than 121,000 fatalities, according to data from the health ministry.
Bloomberg
GDP plunged 9.7% from the previous three-month period, more than the median estimate for a 9.2% tumble from analysts in a Bloomberg survey. From a year ago, Brazil’s economy contracted by 11.4%, the national statistics agency reported on Tuesday. Both drops were the biggest of a series going back to 1996.
The figures reflect a period when an explosion in Covid-19 cases turned Latin America’s largest economy into a global virus hot-spot and prompted a mishmash of lockdown measures across the country. Since then, President Jair Bolsonaro’s administration has spent billions of dollars on stimulus including monthly stipends and employment subsidies.
The move has put Brazil’s economy on better footing than its neighbours and prompted analysts to pare their 2020 recession calls.
Despite the record plunge, the Brazilian economy fared better than its Latin American peers in the second quarter: Chile’s GDP fell 14.1% from the same period a year ago, while Mexico’s shrank 18.7% and Peru’s plummeted 30.2%.
The economy ministry attributed Brazil’s superior economic performance to emergency measures that limited the deterioration of the job market. “However, for the recovery to be consistent, it’s key to maintain the agenda of structural reforms and fiscal consolidation,” it said in a statement.
In the second quarter, investments dived by 15.4% from January-March, while family consumption collapsed by 12.5%, the statistics agency reported. On the other hand, agriculture rose by 0.4% on the back of soy and coffee.
There are signs that government spending and the rollback of social-distancing policies helped segments such as retail sales recover towards the end of the quarter. Bolsonaro said on Tuesday that he would extend stipends for informal workers to the end of the year, cutting the amount paid by half.
Brazil has recorded more than 3.9-million coronavirus infections and more than 121,000 fatalities, according to data from the health ministry.
Bloomberg