Brazil’s economy officially has entered into recession, with the gross domestic product contracting 1.8% in the first quarter and posting a decline for the second consecutive quarter.
RIO DE JANEIRO – Brazil’s economy officially has entered into recession, with the gross domestic product contracting 1.8 percent in the first quarter, compared to the same period in 2008, and posting a decline for the second consecutive quarter, the Brazilian Institute of Geography and Statistics, or IBGE, said Tuesday.
The GDP of Latin America’s largest economy contracted 0.8 percent in the first quarter compared to the fourth quarter in 2008, in which it had fallen 3.6 percent.
The Brazilian economy started to contract last October as a result of the global economic crisis, which caused a strong decline in international demand for primary materials, of which Brazil is one of the world’s biggest exporters.
Despite the drop in GDP in the last quarter of 2008, Brazil closed out the year with economic growth of 5.1 percent.
And although it is now technically in a recession, the Brazilian economy has grown 3.1 percent over the last 12 months, up to last March, compared to the April 2007 to March 2008 period, the IBGE said.
Also, despite the fact that the government has reduced its goal for economic growth this year from 4.5 percent to 1.5 percent, Finance Minister Guido Mantega says that the economy has already started to rebound and that it will end the year in positive territory.Brazil Finance Minister Confirms Brazil Officially in Recession but Forecasts Return to Growth