GDP in the Second Quarter: A Long and Deep Recession

BRAZIL ECONOMICS - Report 31 Aug 2015 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

The GDP contraction of 1.9% in the second quarter (Graph 1) confirmed the expectation that the recession would deepen. Because of the negative carry-over to the rest of the year and all the evidence that further contraction will happen in the third quarter, GDP will likely decline by 3% in 2015 as a whole. The probability is also now higher that the economy will contract again in 2016, meaning the current recession will be one of the longest and deepest in the past 30 years.

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