SAO PAULO Ė The economy grew 0.50 percent in the first quarter, compared to the same period in 2018, reaching 1.7 trillion reais (about $425 billion), the Brazilian Institute of Geography and Statistics (IBGE) said on Thursday.
Brazilís gross domestic product (GDP), however, fell 0.20 percent, compared to the fourth quarter of 2018, resulting in the first quarter-on-quarter contraction since the end of 2016.
The GDP numbers met market expectations and confirmed the forecast by the approximately 100 private-sector analysts surveyed by the Central Bank.
Economists have been revising their GDP forecasts for Brazil downward and warning that the economic recovery faces challenges.
Brazilís economy, which contracted by roughly 7 percent during a deep 2015-2016 recession, grew 1.1 percent in 2017 and then expanded at that same clip in 2018.
As of March 31, Brazilís economy grew 0.90 percent on a year-on-year basis.
In the first quarter, GDP totaled 1.4 trillion reais (about $350 billion) in real terms.
During the January-March period, on a sector-by-sector basis, agriculture contracted 0.10 percent and manufacturing declined 1.1 percent, while services grew 1.2 percent, while gross fixed capital formation inched up 0.90 percent, household consumption rose 1.3 percent and government consumption edged 0.10 percent higher.
In mid-May, Economy Minister Paulo Guedes said the economy had hit rock bottom and the governmentís 2019 GDP forecast would be lowered to 1.5 percent, down from 2.2 percent in April.
The markets are eying potential passage of pension reform, a measure that rightist President Jair Bolsonaro says is a crucial step in lowering a high budget deficit and getting the economy back on track.
Bolsonaro has warned of an economic collapse in the coming years if Brazilís Congress does not pass pension reform.
Under Brazilís current system, employees are eligible to retire with a full pension if they meet the minimum age requirement (65 for men and 60 for women) or if they have contributed to social security for a certain number of years (35 in the case of men and 30 for women).
Bolsonaroís plan, which encompasses both the public and private sectors, would keep the minimum retirement age for men at 65 but raise it to 62 in the case of women.
However, individuals would no longer be eligible to receive a pension based on years of contributions if they are below the minimum age. Under current rules, it is common for Brazilians in their 50s to retire with a full pension.