Brazil’s GDP shrank 0.1 percent during Q3, in line with economists’ expectations. While disappointing, the result is hardly a surprise. Last month, the Central Bank’s economic activity index (IBC-Br) registered drops of 0.27 percent during the month of September and 0.14 percent during Q3.
Q2 results were also revised down, from the initial -0.1 to -0.4 percent. With two straight negative quarters, Brazil is now in a technical recession.
Even the agribusiness sector, which has been a positive outlier in the economy especially during the pandemic, contracted 8 percent in the quarter. The drop was a result of challenging climate conditions which disrupted grain production and coffee harvests.
“The trade negative ended up pulling the GDP variation down compared to the previous quarter,” said Rebeca Palis, a director at the Brazilian Institute of Geography and Statistics.
In the year-on-year comparison, among exports, those that registered the best results were metal products, machinery and equipment, and services. In the list of imports, the most significant increases came in automobiles, pharmachemical products, machinery and equipment, and chemical products.