Brazil’s GDP fell 5.4 percent in the first quarter of this year, the FT reports:
GDP contracted for the fifth straight quarter in the three months to March and has declined or been virtually flat in eight of the past 10 quarters.
Goldman Sachs economist Alberto Ramos said a depression was defined as a recession that lasts eight or more straight quarters in which there is a decline in real GDP of 10 per cent or more.
He said Brazil`s recession had been running for two years and had reduced the size of the economy to the level of late 2010 with a decline in real per capita GDP of 9 per cent.
“Given its exceptional depth, breadth, and duration, the ongoing cyclical contraction of real activity [has] acquired some of the characteristics of an economic depression,” Mr Ramos said in a note.
The awful figures were published the same day as the official suspension of Dilma Rousseff’s presidency in preparation for an impeachment trial. The acting president, Michael Temer, has little support and expectations for him are low. But given the hand he’s been dealt, it’s not clear how much he could do even if he did turn out to be a talented executive.
The Temer government was off to a busy start on Thursday, naming a new treasury head and promising to close the deficit. Temer also appears close to giving an answer to an important geopolitical question: Will Brazil stand by Venezuela as Nicolás Maduro teeters?
The Brazilian government may help block Venezuela from taking the rotating presidency of the Mercosur trade group this month, a move it would make in part to prevent beleaguered Venezuelan leader Nicolas Maduro from strengthening his grip on power.
Between internal corruption and economic challenges and international crises, it’s about as challenging a time to be taking the helm in Brazil as one can imagine.