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Brazilian Economy Contracts More Than Expected In Q3Tuesday, December 03, 2013 > 11:08:00
The Brazilian economy slipped into contraction in the third quarter after recording strong growth in the June quarter. The rate of fall exceeded economists' expectations.
Data released by statistical office IBGE on Tuesday revealed that gross domestic product (GDP) decreased a seasonally adjusted 0.5% sequentially in the September quarter, more than offsetting the upwardly revised 1.8% growth recorded in the second quarter. Economists had forecast a slower decrease of 0.3% for the third quarter.
The downturn was driven mainly by a 3.5% contraction in the agriculture sector. Manufacturing and service production remained broadly unchanged.
The expenditure side break-up of the GDP showed that gross fixed capital formation decreased 2.2% quarter-on-quarter in the three months to September. Meanwhile, domestic consumption expenditure increased 1%, and government's consumption expenditure rose by 1.2%.
Annually, GDP increased 2.2% in the third quarter, slower than second quarter's 3.3% growth. Expectations were for a 2.4% growth.