Economy

How Brazil’s economy depends on the construction sector

construction sector brazil recession

The Brazilian recession ended over two years ago, but the country’s economy remains sluggish—almost flatlining. After falling 9.9 percent between the February 2014 peak and October 2016 valley, the economy has grown by only 4 percent until January 2019, according to the monthly GDP monitor developed by think tank Fundação Getulio Vargas. Adding up every phase of recession and recovery in the 59 months after the economy peaked, we are left with one of the worst economic cycles in Brazilian history.

The chart below shows the GDP losses in all Brazilian recessions since 1980. and the accumulated growth in the 27 months which followed. Excluding 2014–2016, the average loss in recessive periods is of 5.1 percent—followed by an average 10.3-percent growth in the following 27 months. In other words, not only were we below the average levels of growth in times of expansion, but, by now, the Brazilian economy should have already recovered the losses of 2014–2016.

construction sector brazil recession

Instead, the country has regained only 36.2 percent of its economic losses, in monthly terms. Moreover, in the 59 months following the economy’s peak, the country’s...

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