By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – The Gross Domestic Product (GDP) in Brazil closed 2016 with a retraction of 3.6 percent, making this current recession (2015-2016) the biggest the country has faced since 1947 when the government started to keep track of the GDP, according to the Brazilian Statistics Bureau (IBGE). In 2015 the Brazilian economy had already retreated by 3.8 percent.
Analysts however say that although it was the eighth consecutive quarter of contractions, the Q4 2016 should be the last on in the cycle. According to economists this quarter (Q1 2017) the GDP should rebound and end in positive territory.
“We suspect that Q4 should also mark the end of the recession,” said Neil Shearing, Chief Emerging Markets Economist at Capital Economics on Tuesday morning. “Not only do we expect the economy to return to growth this year, but our forecasts for 2017 and 2018 are above consensus.”
According to the IBGE during the fourth quarter of 2016, the GDP decreased by 0.9 percent in relation to the previous quarter and fell by 2.5 percent in comparison with the same period of the previous year.
Services registered the largest contraction in the Q4/Q3 comparison, by falling by 0.8 percent , followed by industry, down by 0.7 percent. Agriculture, which for the year registered the highest decline (6.6 percent) registered a growth of one percent in the fourth quarter of last year.
Brazil’s Finance Minister, Henrique Meirelles also sounded positive as he met with President Temer and other cabinet members on Tuesday morning to discuss measures to increase economic development. “GDP released today [Tuesday] refers to last year. It’s (like) looking in the rearview mirror,” Meirelles was quoted by Globo as saying.
Overall Brazil’s GDP 2016 totaled R$6,266.9 trillion. The country’s investment rate for the year was 16.4 percent of GDP, down by 18.1 percent from 2015 while the rate of savings was 13.9 percent in 2016, down from the 14.4 percent registered in 2015.