These data made public on Friday by the IBGE statistics institute are in line with analysts' expectations, after the -3.9% plunge in 2020.

For the year 2022, the experts consulted for the last weekly Focus survey of the Central Bank expect weak growth of only 0.3%.

The situation remains worrying, with galloping inflation and a rise in interest rates which could slow down growth this year, marked by the presidential election in October where Jair Bolsonaro hopes to be re-elected.

Brazil's GDP grew 0.5% in the fourth quarter (October to December) from the previous quarter, after contractions of -0.3% in the second and -0.1% in the third.

"The data for the fourth quarter show the positive effects of the progress of vaccination, which has allowed the resumption of activities, in particular from the second half of the year", underlines to AFP the economist Gilberto Braga, professor of the IBMEC business school in Rio de Janeiro.

Growth was mainly driven by the industry (+4.5%) and services (+4.7%) sectors, whose rebound was expected after a year 2020 very affected by the pandemic which made more than 650,000 dead in Brazil.

The agricultural sector, on the other hand, experienced a slight decline in 2021, due to a drop in production of sugar cane, corn and coffee for crops, beef and milk for livestock, due in particular to "adverse climatic conditions", with a historic drought, according to the IBGE.

A cattle farm in Tailândia, in the Brazilian state of Parà, on September 18, 2021 MAURO PIMENTEL AFP / Archives

"Stagflation"

For 2022, "the uncertainties about the political future of the country make the scenario more unpredictable", estimates Mr. Braga.

Not to mention the impact on the world economy of the armed conflict in Ukraine and the sanctions against Russia with which Brazil maintains links in the BRICS group (Brazil, Russia, India, China and South Africa).

"The agricultural sector is one of the engines of the Brazilian economy and the production of cereals risks being affected by the rise in the price of oil and the difficulties in importing fertilizers" from Russia, the main supplier of Brazil .

Despite emerging from recession in the fourth quarter, analysts believe that Brazil has entered a phase of "stagflation" -- high inflation and stagnant growth -- which should be aggravated by the geopolitical context with Russia's offensive in Ukraine.

In 2021, Brazil, a huge country of 213 million inhabitants, recorded double-digit inflation (+10.06%), the worst in six years.

At a gas station in Sao Paulo, December 31, 2021 Filipe ARAUJO AFP / Archives

This has prompted the Central Bank to raise its key rate several times, currently at 10.75%, which may constitute an obstacle to economic recovery, with increasingly expensive loans.

"Inflation has mainly affected the poorest, due in particular to the rise in food and fuel prices, aligned with international market prices", explains Gilberto Braga.

The unemployment rate has fallen in recent months and reached 11.1% in the last quarter of 2021, returning to its pre-pandemic level.

But more than 12 million people remain looking for work and average worker earnings fell 7% last year compared to 2020.

© 2022 AFP