Economy in the South American country contracted by 0.3% during the first three months of 2016, for the fifth consecutive quarter
With the release of President Dilma Rousseff currently awaiting the impeachment trial, Brazil is going through the worst recession in the last decades.
According to the Instituto Brasileiro de Geografia e Estatistica (IBGE) data, Brazil’s GDP dropped by 5.4%. Further 4.3% contraction is expected for the rest of 2016. The decrease is attributed to bad political decisions and corruption.
Moreover, agriculture, industry and services, the country’s main revenue sectors lost part of production lines, while exports raised by 6.5% due to the fall in the real (Brazilian currency).
“With fiscal policy set to tighten over the second half of the year, this prop to the economy will go,” Neil Shearing, chief economist at Capital Economics, commented.
The falling economy in Brazil is expected to drop even further before exiting recession. The end of the crisis was forecasted one year from now, as the country has an enormous budget deficit and 11 million unemployed people.
The Senate trial of Dilma Rousseff is expected to end in September, as well as political uncertainty taking toll over Brazil.