Brazil’s recession deepened early this year. In the first quarter of 2016, Gross Domestic Product (GDP) fell by 0.3% compared with the previous three months, according to data released on Wednesday (1st) by the Brazilian Institute of Geography and Statistics (IBGE). It was the fifth quarterly decline followed the Brazilian GDP. In 2015, the Brazilian economy “shrank” 3.8% – the worst result in 25 years
Despite the contraction was the best result in this comparison since the fourth quarter of 2014, when GDP grew by 0. ,two%. But the data is far from good, assesses the IBGE.
“Upgrade for now there was not even because even in the margin variation is negative, but it is much smaller than it had before because it kind of kept the level drop compared to the previous quarter, “said Rebeca Palis, National Accounts coordinator of the IBGE.
in the last four quarters, the cumulative decline is 4.7% over the previous four quarters.
current values
in current values, GDP reached R $ 1.47 trillion in the first quarter of 2016. compared to the same period 2015, there was drop 5, 4% of GDP -. the eighth contraction then the economy
in the last four quarters, the cumulative decline is 4.7% over the previous four quarters
in current values. the GDP accumulated in the four quarters to March 2016 amounted to R $ 5.94
triilhões, R $ 5.088 trillion for the Value Added (VA) at basic prices and R $ 855.1 billion to Taxes on net Products grants
dEMAND
for the demand side, investments and household consumption were negative highlight:. the first with a drop of 2.7%, and the second of 1.7%. government spending were the only ones to record growth of 1.1% over the previous three months.
Compared to the same period last year, all components of demand fell for the fifth quarter followed .
household consumption
in comparison with the first quarter of 2015, household consumption suffered a “fall” of 6.3%. The indicator, which was one of the impulses to GDP between 2008 and 2001, completed eight quarters of decline in this comparison. Accumulated in four quarters, the decline comes from the period from April to June last year.
According to the IBGE, this decline is explained by the nominal deterioration of 2.1% of the balance of credit operations national financial system to individuals, the increase in the Selic rate, which reached 14.3% pa in the first quarter from 12.1% a year in the same period 2015, and the growth of inflation by 10% in the first quarter 2016 compared to the first quarter of 2015.
government spending
government consumption expenditure grew 1.1% compared to the previous quarter but showed a decline of 1.4% compared to the period January-March 2015.
“I was with a reduction, which continued in the quarter, but it was lower than the previous quarter-on-year . And compared to the previous quarter, gives a rise. The government was making restraint in consumer spending and this restraint continued, but was lower than had occurred in the fourth quarter of the previous year which had been the strongest of the series in recent times, “said Rebeca Palis, National Accounts Coordinator.
Investments
for the tenth consecutive quarter, gross fixed capital formation fell compared to the previous three months, a fall of 2.7% – less pronounced, however, that recorded in previous periods (see the chart).
Facing the first three months of 2015 was the eighth drop then 17.5%. “This decrease is explained mainly by the fall in imports and domestic production of capital goods being influenced by the negative performance of the construction in this period,” the IBGE.
pRODUCTION
according to the IBGE, the industry had the worst outcome from the perspective of production, down 1.2% compared to the previous three months. The agriculture decreased by 0.3%, while in services the contraction was 0.2%.
Industry
In the industry, the biggest drop compared to the previous three months It occurred in mining, 1.1%. The manufacturing industry fell by 0.3% – the sixth consecutive quarter of contraction. Construction fell 1%, while electricity and gas, sewage and urban sanitation increased 1.9%
Compared to the same period of 2015, the industry had contraction of 7.3%. – The eighth then. The manufacturing industry fell 10.5%, while mining fell 9.6%.
About the fall of 9.6% in the mining, compared to the first quarter of 2015, IBGE explained that the performance “was influenced both by the fall of the extraction of iron ore and the extraction of oil and natural gas.”
Agricultural
After show recovery in the last quarter of 2015, agriculture fell again early this year, with a contraction of 0.3% compared to the previous three months. Before the first quarter of 2015, the decline was more pronounced, 3.7%.
In the accumulated in four quarters, was the first decline in the sector since 2012, falling 1%.
foreign Trade
sales of Brazil abroad were the positive data released on Wednesday by the IBGE. Facing the last three months of 2015, Brazilian exports grew 6.5%. Since the import of goods and services – that have negatively on GDP. – Fell by 5.6%
According to Claudia Dionisio, coordinator of quarterly accounts IBGE, the positive performance of exports that was observed in the fourth quarter of 2015 continued in the first quarter of 2016.
“Export was already positive contribution, but in first quarter 2016 increased. The devaluation favored, and even weaker domestic economic activity favors in as part of domestic production ends up being sent out. “
pessimistic forecasts
The result of GDP in the first months of this year shows that Brazil is on track for another year of recession. An earlier report released by the Organization for Economic Cooperation and Development (OECD) estimates that the country’s economic situation will deteriorate further this year, with a contraction of 4.3% in GDP, followed by a further fall of 1, . 7% in 2017
Since financial markets are predicting a less sharp drop of 3.81% in the economy this year – the same expected by the government, according to the income and expenditure report of the budget for the second quarter of this year.
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