SAO PAULO – Brazil’s economy grew slightly in the second quarter of 2017, expanding 0.2 percent relative to the year’s first three months, the government said Friday.
The South American giant had posted gross domestic product (GDP) growth of 1 percent in the January-to-March period, bringing an end to eight consecutive quarters of contraction.
Compared to the second quarter of 2016, the economy grew 0.3 percent between April and June, the Brazilian Institute of Geography and Statistics (IBGE) said.
The agricultural sector, which grew a whopping 13.4 percent in the first quarter, its best result in 20 years, remained unchanged between April and June, while the industrial sector fell 0.5 percent due mainly to a 2 percent drop in construction output.
The services sector expanded by 0.6 percent in the second quarter thanks to improvement in retail trade (up 1.9 percent) and real-estate activity (up 0.8 percent).
Household consumption, which is a leading engine of Brazil’s economy and accounts for around 60 percent of GDP, returned to growth – at a rate of 1.4 percent – after nine quarters of contraction.
Consumer spending has been spurred by lower interest rates and a sharp drop in the inflation rate in recent months.
Brazil’s economy now has grown for two straight quarters after two years of recession.
The South American country’s economy contracted 3.6 percent in 2016, remaining in recession for two consecutive years for the first time since the 1930s.
Latin America’s largest economy shrank by 3.8 percent in 2015, its worst result in 25 years, and eked out just 0.1 percent growth in 2014.
Economists are forecasting 0.39 percent growth in 2017 and 2 percent growth in 2018.
President Michel Temer says his administration’s efforts to tackle a large budget deficit have given the economy a boost, although most of his austerity measures – most notably a proposed overhaul of Brazil’s pension system – still require congressional approval.