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BRIC wall: Brazil’s economy slips into a recession

First Published      Last Updated Aug 29 2014 12:26 pm

Sao Paulo • Brazil has slipped into recession, with government figures released Friday showing gross domestic product contracting for a second consecutive quarter.

The government's IBGE statistics bureau said GDP in the second quarter fell by 0.6 percent from the previous three months. Revised figures for the first quarter showed a drop of 0.2 percent. The government initially had reported first-quarter growth of 0.2 percent.

The bureau said the country's GDP stands at $567 billion.

Brazil last experienced a recession between October 2008 and February 2009, when a world economic crisis slashed demand for steel, minerals, farm goods and other Brazilian exports.

IBGE's national accounts coordinator, Rebeca de La Roque, told the G1 news portal that the main cause for this year's second quarter contraction was a 5.5 percent drop in investments and a 1.5 percent decline in industrial output.

The slump comes at a bad time for President Dilma Rousseff, who is seeking re-election on Oct. 5.

A poll published this week showed that Marina Silva of the Brazilian Socialist Party would defeat Rousseff in a second-round runoff vote.

The Ibope polling firm said 45 percent of respondents would vote for Silva in an expected second-round, while 36 percent favored Rousseff. The poll had a margin of error of 2 percentage points.