Brazil’s Economy Collapses 9.7 Percent in the Second Quarter

President Jair Bolsonaro’s administration Tuesday reported that the Brazilian economy collapsed by 9.7 percent in the second quarter compared to the previous three months.

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The Institute of Geography and Statistics (IBGE) informed that Brazil is going through a recession since it has had two consecutive quarters with a decrease in its Gross Domestic Product (GDP), which already fell by 1.5 percent between January and March.

This new recession represents the largest drop in the country's history since 1996 when Brazil faced a severe financial crisis.

So far, however, agricultural activities have grown by 0.4 percent, driven mainly by soybean and coffee production.

Between April and June, Foreign Direct Investment fell by 15.4 percent and household consumption by 12.5 percent.

These results reverse the timid recovery that the country’s economy experienced between 2017 and 2019, a period in which it grew at a rate of about 1 percent per year.

Currently, however, 13.3 percent of the economically active population is unemployed, which is equivalent to 12.8 million people without a job.

Multilateralism organizations such as the International Monetary Fund (IMF) predict that the Brazilian economy could contract above 8 percent until the end of the year.