Brazil: strong rebound in GDP in Q3 but the country remains in a critical situation

In a shopping street in Sao Paulo.

REUTERS / Amanda Perobelli

Text by: RFI Follow

2 min

Brazil's gross domestic product rebounded strongly in the third quarter, with an increase of 7.7%, but the country remains in a critical situation.

Severely affected by the coronavirus crisis, the economy is struggling to recover.

The largest economy in Latin America is on a drip of state aid.

Brazil is the second country most bereaved by Covid-19, with more than 174,000 dead.

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This 7.7% rebound in Brazil's gross domestic product only temporarily pulls the country out of the recession into which the coronavirus crisis plunged it.

If we compare this result to that of the third quarter of the previous year, it is down by almost 4%, and above all it is one point lower than the rebound expected by analysts.

Other indicators are disappointing, such as still falling exports and household consumption which is struggling to regain a level sufficient to revive activity.

The pandemic hit the Brazilian economy hard, as it was recovering from the violent recession of 2015/2016.

► To read also: Health and political crises in Brazil: "The power is in a logic of headlong flight"

The government forecasts for this year a GDP decline of 4.5%, and a growth of 3.2% in 2021. Figures more optimistic than the forecasts of the International Monetary Fund, or the OECD, which sees no d improvement before at least 24 months.

The rebound in the third quarter is explained by government aid to businesses and the poorest, but with high inflation, a deterioration in the job market, and an increase in fiscal deficits, it seems increasingly complicated for the government of Jair Bolsonaro to conduct the reforms necessary to restore public accounts.

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