Brasilia: Brazil is in recession after Latin America’s largest economy contracted during two successive quarters, the National Statistical Institute (IGBE) reported Friday.
The IGBE said the GDP shrank 0.6 per cent in the second quarter, and 0.2 per cent in the first quarter, which it revised down from 0.2 per cent growth.
Coming just weeks before October 5 presidential and general elections, the figures are another knock to already low industrial and consumer confidence in what once was a rapidly growing, regional powerhouse.
Declining GDP in two consecutive quarters is the technical definition of a recession.
The second quarter decline was steeper than the 0.4 per cent predicted by a cross-section of leading economists.
Year on year, GDP shrank 0.9 per cent.
Contributing to the poor performance was a 0.3 per cent drop in household spending.
It comes with leftist President Dilma Rousseff in a tough fight to win re-election with polls showing a surge in support for challenger Marina Silva.
The Rousseff administration has cut growth forecasts for the year to 1.8 per cent but market forecasts are for 2014 GDP to grow by barely 0.7 per cent.
That would represent four straight years of sluggish growth for Brazil. After 2010 saw GDP soar 7.5 per cent 2011 saw an increase of just 2.7 per cent before 2012 brought just a 1.0 per cent rise.
Last year Brazil recorded GDP growth of 2.5 per cent.
