Brazil’s pandemic-stricken economy down 1.5% in first quarter

The reduction was chiefly pulled by services

Published in 29/05/2020 - 15:48 By Vitor Abdala - Rio de Janeiro

Brazil’s gross domestic product sank 1.5 percent in the first quarter of this year compared to last quarter in 2019. The figures were released today (May 29) by the government’s statistics agency IBGE.

Compared to the first quarter in 2019, the GDP slipped 0.3 percent. Month on month, the figure is up 0.9 percent.

The contraction in the first quarter against the previous one was the first fall in the GDP in this type of comparison since the last quarter of 2018.

The GDP in the first quarter, IBGE reported, was affected by the pandemic of the new coronavirus and social distancing measures adopted in several cities across the country since mid-March.

The declines was pulled chiefly by services, which in turn were down 1.6 percent from the last quarter of 2019 to the first one this year.

“What happened in Brazil is the same as what took place in other countries affected by the pandemic—the reduction in services directed at families due to establishments being closed. Durable goods, vehicles, clothing, beauty parlors, gyms, housing, and food were severely affected by social distancing,” said Rebeca Palis, IBGE coordinator for National Accounts.

Industry was also reported to fall 1.4 percent. Agriculture was the only productive sector to grow (0.6%). Under the perspective of demand, family consumption dropped two percent.

A decrease was also observed for exports (-0.9%). Government consumption, however, rose (0.2%), as well as gross formation of fixed capital, i.e. investment (3.1%), not to mention imports (2.8%).

Translation: Fabrício Ferreira -  Edition: Kleber Sampaio/Denise Griesinger

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