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Brazil’s government saw record deficit, GDP down 0.6%

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Staff Writer | September 1, 2016
Brazil’s federal, states and local governments had a combined primary deficit of BRL 12.816 billion ($3.957 billion) in July.
Brazil central bank
LatAm   The lowest result for the month
This is the lowest result for the month since records started being kept in 2001. The primary deficit means spending outweighed revenues, and it does not include government debt expenses.

The Brazilian Central Bank said that the year-to-date deficit is BRL 35.592 billion ($10.991 billion). The comparable period of 2015 had seen a BRL 6.205 billion surplus.

Brazil’s GDP fell 0.6% in Q2 from Q1 as per seasonally adjusted numbers. In Q2 from the year-ago period, GDP shrank by 3.8%. From January through June, GDP shrank by 4.6% compared with the first half of 2015.

The quarterly national accounts report by the Brazilian Institute of Geography and Statistics (IBGE) shows GDP shrinking 4.9% in the four quarters through Q2 2016 from the prior four-quarter period. In current values, the Brazilian GDP reached BRL 1.5 trillion in Q2 2016.

The 0.6% GDP drop seen in Q2 means Brazil’s economy has shown contraction for six straight quarters. Industry prevented the GDP from falling even further, with 0.3% growth, while agriculture and services activity slid 2% and 0.8%.