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By Lise Alves, Senior Contributing Reporter

SÃO PAULO, BRAZIL – The Gross Domestic Product in Brazil fell by 0.3 percent in January compared to the same period last year, according to the Monitor report by the Getulio Vargas Foundation (FGV). Despite the decrease, January’s result was the least negative result of the last 22 months, according to the entity, which sees a less negative scenario on the horizon.

Brazil,Brazil's GDP has decreased in January, but at a slower rate, says FGV,
Brazil’s GDP has decreased in January, but at a slower rate, says FGV, photo by Marcio de Assis/Wikimedia Creative Commons License.

Indicators released in recent weeks have reinforced the perception that the economic crisis begins to dissipate, generating less negative prospects in the short term and allowing for a greater optimism with the macro picture,” the beginning of the report states.

For FGV analysts, however, this does not imply that the difficulties no longer exist and have been overcome. “The fiscal restraint is a continuous threat and a significant recovery of employment and income in 2017 not much more than a promise,” warn analysts.

According to the entity the main positive highlights for the three months encompassing November and December of 2016 and January of 2017 were mineral extraction (+7.5 percent) and electricity (+5.7 percent). The sectors of construction (-6.5 percent) and transport (-5.1 percent) contributed to the decline of the index during that period.

FGV’s Monitor report for January is in line with Brazil’s Statistics Bureau (IBGE) report for the last quarter of 2016, which showed that the country’s Gross Domestic Product 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.

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