Economy contracted 1.7 per cent in the second quarter

The Brazilian economy contracted from July to September of this year from the preceding three-month period, according to numbers released by the Brazilian Institute of Geography and Statistics (IBGE).

Brazil’s economy contracted a greater than expected 1.7 per cent in the third quarter, deepening the recession in the world’s seventh largest economy.

Investment fell 15.0 percent from a year earlier, declining on a sequential basis for the ninth straight quarter.

Brazil’s economy contracted for the third quarter-in a row during the three months to the end of September.

Declines were across the board, with agriculture contacting 2.4%, industry down 1.3%, and services off 1%.

The real, Brazil’s currency, was not significantly affected by the news, remaining steady in early trading.

If that happens, it would mark the deepest recession in 85 years, going back to the Great Depression years of 1930-31. Delcídio do Amaral, the government’s leader in the Upper House and, investment bank BTG Pactual CEO André Esteves, were arrested last week accused of attempting to obstruct the Petrobras investigation.

The finance ministry said in a statement that the third-quarter data “point to a more extended adjustment of the Brazilian economy, due largely to factors beyond the impact of fiscal rebalancing… stemming from persistent uncertainty”.

Previously, economists predicted a full-year contraction of 4.2 per cent, but the latest figures are likely to pull that higher. But exports fell 1.8 percent from the second quarter due to uncompetitive factories, weak demand from regional trade partners and soft commodity prices. With rising inflation and unemployment, and high interest rates, consumer confidence is down. “Honestly, my friend, business is a catastrophe, a total disaster…If I don’t sell, I can’t buy” presents, she said.