Qualitative Indicators of the Contraction of Investments

BRAZIL ECONOMICS - Report 22 Jun 2015 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

The current recession differs from that in 2008-2009: it will be less severe but will last a good deal longer. The dip in the IBC-Br for April is an additional indicator that the contraction of GDP in the second quarter of 2015 will be more intense than in the first three months (Graph 1). There is also evidence that the cycle of contraction of fixed capital investments, which started in the third quarter of 2013, has not yet ended, so further reduction of potential GDP growth is impending.

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