Investors breathed a sigh of relief this morning as the Brazilian economy escaped a technical recession, posting 0.4 percent GDP growth in the second quarter of 2019. Shortly after the news, Brazil’s benchmark stock index Ibovespa rose 1,000 points and is currently operating 1.13 percent up for the day. However, despite slightly better than expected results, the Brazilian economy still has a long way to go to reach full recovery.
Despite the slim margins, the results still surprised specialists, who expected growth of 0.2 percent in comparison to Q1. Quarterly performance was boosted by industry, which grew 0.7 percent over the same period.
“The results were surprising, considering some of the projections even expected GDP to contract. The industry’s performance was certainly good news,” said Camila Abdelmalack, an economist at CM Capital, to The Brazilian Report.
No recession: construction sector building a comeback
Looking at individual sectors, the transformation and construction industries led the way upwards. The latter rose 2 percent in the yearly comparison for the first time in 20 quarters, after being rocked by a steep decline in demand and corruption scandals connected to Operation Car Wash. Ms. Abelmalack highlights that it is...
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