[Economics] The Brazilian economy fell for the second consecutive quarter and is in a technical recession

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It fell 0.1%, prolonging the fall of 0.4 in the previous three months. Gross domestic product, however, advanced 4.0% compared to the same period in 2020, in the midst of the pandemic

The Brazilian economy fell by 0.1% in the third quarter compared to the second and entered the so-called “technical recession” by chaining two consecutive quarters of retraction, since between April and June it had fallen by 0.4%, reported this Thursday government.

The gross domestic product (GDP) of the largest Latin American economy, however, advanced 4.0% in the third quarter compared to the same period of 2020, thus accumulating an expansion of 3.9% in the last twelve months until September compared to the immediately previous year.

This result is compatible with the projections of both the Government and the economists that, despite the current stagnation, Brazil will end 2021 with a growth of about 4.8% after having suffered a retraction of 3.9% in 2020 as a result of the crisis generated by the COVID-19 pandemic.

The Brazilian Institute of Geography and Statistics (IBGE) revised last year's GDP result and reduced the retraction from the previously calculated 4.1%, which was a record for a year, to the 3.9% announced this Thursday.

 

The Brazilian economy began to recover from the blow caused by the pandemic at the end of 2020 but that reaction has been losing strength, to the point that the country entered the so-called “technical recession” (two consecutive quarters of negative growth), and is also facing a high inflation, over 10% year-on-year, and unemployment rates still high (12.6%).

GDP jumped 7.8% in the third quarter of last year compared to the immediately previous one, but that growth rate fell to 3.1% in the last quarter of 2020 and to 1.3% in the first quarter. quarter of 2021 before it fell 0.4% in the second quarter of this year and 0.1% in the third.

In the same way, the economy registered a growth of 12.3% in the second quarter of this year compared to the same period of 2020, but in the third quarter the growth in that comparison was only 4.0%.

And in the accumulated of the year, the Brazilian GDP registered a growth of 6.5% in the first semester of 2021 compared to the first six months of 2020, but the expansion in the first nine months of 2021 was located at 5 , 7% in the comparison with January and September of last year.

 

Sectors

According to the official statistics body, the economic downturn in the third quarter compared to the second was caused mainly by the agricultural sector, whose production plunged 8.0% due to weather problems, since after a long drought, the country faced frost in July.

The industry remained stagnant in the third quarter (0.0%) and the services sector, which had been recovering after the pandemic, lost momentum and only grew 1.1% between July and September.

In comparison with the third quarter of last year, on the other hand, growth was driven precisely by services, with an expansion of 5.8%, since industry only grew by 1.3% and agriculture fell by 9 , 0%.

The fall in the agricultural sector in the third quarter was caused by the collapse in the production of foods such as coffee (-22.4%), cotton (-17.5%), corn (-16.0%), orange (- 13.8%) and sugar cane (-7.6%).

And in the accumulated of the first nine months of the year, growth of 5.7% was driven by industry, with expansion of 6.5%, and services (+ 5.2%), since agriculture accumulated a retraction 0.1% in the year.

The GDP result in the third quarter was within the expectations of economists, who projected that the rate would vary between a retraction of 0.6% and a negligible growth of 0.3%, although most analysts already forecast that the country was in a technical recession.

According to economists, this technical recession is associated with the sharp drop in consumption by Brazilian families caused by high inflation, still high unemployment, falling income and rising credit costs, with interest rates at their highest levels. in four years.

 

Link: https://www.infobae.com/america/america-latina/2021/12/02/la-economia-brasilena-cayo-por-segundo-trimestre-consecutivo-y-esta-en-recesion-tecnica/