Brazil’s GDP Plunged 11.2 Percent in Q2 from Q1, Shows FGV Indicator

RIO DE JANEIRO, BRAZIL – Brazil’s Gross Domestic Product (GDP) contracted 11.2 percent in Q2 compared to Q1 2020, according to the first preview of the June Economic Activity Indicator (IAE), released on Tuesday, August 4th, by the Getúlio Vargas Foundation (FGV).

The collapse in April was the main reason for the quarter’s negative performance, given that in June alone, the IAE recorded a 0.7 percent increase over May.

The official extent of the decline, as calculated by the IBGE (Brazilian Institute of Geography and Statistics), will only be disclosed on September 1st.

As compared to Q2 2019, the slump in economic activity as pointed out by the IAE was 11.7 percent. “In June, there was a 9.4 percent drop in activity, based on the same comparison, a better result than in May (-12.7 percent).

With these results, “the year-to-date rate for the 12 months to June reached -2.2 percent and the year-to-date rate for the first half of the year reached -5.8 percent,” states the note released by the FGV.

The IAE seeks to anticipate the Brazilian economy’s trend by publishing three versions based on the main monthly activity surveys released by the IBGE: the Monthly Industrial Survey – Physical Production (PIM-PF); the Monthly Trade Survey (PMC); and the Monthly Services Survey (PMS).

Earlier on Tuesday, when publishing the PIM-PF, the IBGE reported that industrial production increased by 8.9 percent in June compared to May.

Source: Estadão Conteúdo

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