Brazil’s GDP contracts 0.5 per cent from previous quarter; up 2.2 per cent year to year

BRASILIA, Brazil – The economy of Latin America’s biggest country contracted in the third quarter of the year, though it was up from the same period of 2012, the government said Tuesday.

Brazil’s IBGE statistics bureau said Brazil’s Gross Domestic Product slipped 0.5 per cent from this year’s second quarter. It rose 2.2 per cent from the third quarter of 2012.

The bureau said that the GDP contraction was due mainly to a 3.5 per cent drop in agricultural output and a 2.2 per cent decrease in investments. The industrial and services sectors were each up a mere 0.1 per cent from the second quarter, while consumption rose 1 per cent.

The IBGE said that the country’s GDP between January and September was 2.4 per cent higher than during the same period in 2012.

It said that in the third quarter the country’s GDP amounted to 1.2 billion reals ($521.7 million).

Brazil’s economy has slowed since 2010, when its GDP expanded 7.5 per cent. In 2011, it grew by 2.7 per cent and last year’s GDP posted 0.9 per cent growth.

Finance Minister Guido Mantega said Tuesday that despite the poor quarterly performance, Brazil’s economy will get stronger in 2014.

He said investments are expected to increase 7.3 per cent, and family consumption and government spending should each rise 2.5 per cent.

He said that the modernization of airports, the construction of highways and oil exploration activities will attract more investments and “improve the performance of the country’s economy.