Brazil's economy registers record drop in GDP in the second quarter and returns to the same level as in 2009

As a result of the impacts of the Covid-19 pandemic, the Brazilian economy plummeted in the second quarter of 2020 with a 9,7% drop in national GDP

Data released this Tuesday (01) by the Brazilian Institute of Geography and Statistics (IBGE) showed that the Brazilian economy returned to the same level as in 2009, when the country was still suffering the effects of the 2008 global crisis. Gross) shrank by almost 10% in the second quarter of this year compared to the first.

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Experts predicted a 9,4% decline in GDP compared to the first quarter, but the numbers were worse than expected, reaching 9,7%, which is equivalent to R$ 1,653 trillion. Compared to the second quarter of 2019, the drop was 11,4%. The results were strongly influenced by the crisis caused by the Covid-19 pandemic.

O IBGE also demonstrated the low performance of the economy in the first quarter, whose GDP had a retraction of 1,5%. In the first half of 2020, Brazil's economy suffered a 5,9% drop. Considering the accumulated result for the last 12 months, the decrease was 2,2%.

Historical fall of the sectors that represent the national GDP

Of the three sectors analyzed, industry was the most affected, with a decrease of 12,3%. In second place, the segment of services, which fell by 9,7%. The civil construction market recorded a decline of 5,7% in the second quarter of 2020,

The extractive industry, which includes the oil and mining segment, had a reduction of 1,1%. Agriculture was the only sector that presented an increase, around 0,4%, being mainly influenced by the production of soy and coffee.

Minister of Economy says that numbers do not cause concern

The Minister of Economy, Paulo Guedes, said that the data reported on the drop in GDP do not cause concern to the Federal Government. According to him, “This is the impact of the lightning that fell in April”, referring to the effects of the pandemic on the Brazilian economy.

With these numbers presented, Brazil officially enters a technical recession, defined by two consecutive quarters of GDP retraction.