Brazil confirmed its slow exit from the country’s worst recession on record Friday with the economy nudging up 0.2 percent, the second straight quarter to show growth, the official statistics office said.
The increase in GDP surprised analysts polled earlier by financial newspaper Valor who’d been expecting no movement for the second quarter of the year.
Compared to the second quarter of 2016, GDP rose 0.3 percent. In the first quarter, Latin America’s biggest economy expanded one percent.
Brazil plunged into negative growth with 3.8 percent shrinkage in 2015 and 3.6 percent last year, reversing what had been touted as one of the world’s most promising markets. Analysts blame the sharp drop in commodities prices, endemic corruption and the country’s inefficient economy.
The IBGE statistics office said that growth in the second quarter was driven by services, which account for a third of economic output. The sector rose 0.6 percent, compared to zero movement in the first quarter.
However, industry shrank half a percentage point, compared to 0.9 percent growth in the first quarter. Agriculture, which underpinned first quarter growth thanks to bumper harvests, was flat in the second quarter.
Carlos Langoni, a former central bank president, told AFP that the results showed Brazil’s economic “resilience,” although he does not expect to see big advances this year.
“There is a turbulent political backdrop and a multitude of uncertainties,” he said.
– Brazilians reopen wallets? –
Brazilians have been pounded by the economy’s slowdown over the last two years, dovetailing with double digit inflation and unemployment.
However, things are gradually improving on several fronts. Figures released Thursday showed the jobless rate falling to 12.8 percent in the three months through July from 13 percent — well off the high of 13.7 percent in the first quarter of this year.
Annual inflation rose 2.71 percent in July, the lowest rate for 18 years, the IBGE said in August.
Friday’s growth statistics indicated that Brazilians may be finally reopening their wallets: family consumption grew 1.4 percent.
The IBGE said in a statement that there had been an “evolution of positive macroeconomic results through the quarter, such as the slowing down of inflation, the reduction of the key interest rate and growth, in real terms, of salaries.”
However, the brighter picture did not extend to investments, which dropped 0.7 percent in the quarter.
Center-right President Michel Temer, who is battling a criminal charge of corruption, is pushing austerity reforms and a big privatization program that he says will revive the sickly economy after more than a decade of leftist Workers’ Party rule.
However, Dilma Rousseff, whom Temer replaced as president a year ago, lambasted his record, warning that worse was still to come.
“Brazil is heading toward a deepening of the economic, social, institutional and political crisis,” she said late Thursday at an event marking 12 months to the day since she was stripped of office in a Senate impeachment vote, which she claims was “a coup.”
“That’s where we’re headed. I have the impression at times that this is the calm before a tsunami,” she said in Rio de Janeiro.