Brazil economy shrinks 0.2% in first quarter

Brazil’s gross domestic product (GDP) dropped 0.2 percent in the first quarter this year compared to the last quarter of 2018. The reduction comes after a 0.5 percent increase in the third quarter and a 0.1 percent uptick in the fourth last year. The rate was chiefly pulled down by the industrial sector, which faced a 0.7 percent decline.

As per data made public today (May 30) in Rio de Janeiro by the government’s statistics agency IBGE, the Brazilian economy grew 0.5 percent from the first quarter last year, and 0.9 percent in the 12-month period.

Supply

In the industrial sector, the main activities to see a reduction was mining (-6.3 percent), construction (-2), and the manufacturing industry (-0.5). Agriculture also slipped (-0.5 percent). Services saw a rise of 0.2 percent in the period, which prevented the economy from falling further down.

Demand

Under demand, the reduction was mainly pulled by the gross formation of fixed capital—i.e., investment—which fell 1.7 percent from the last quarter of 2018 to the first quarter this year. Export were also reported to have sunk (-1.9 percent).

The government’s consumption was seen to rise (0.4 percent), as well as that of families (0.3), and imports (0.5).