By Jamie McGeever
BRASILIA (Reuters) – Brazil’s economy grew by 1.1% last year, official figures showed on Wednesday, as a deceleration in growth in the final quarter ensured that a recovery from the 2015-16 recession remained one of the worst on record.
With growth slowing in the final three months of the year from the previous quarter, momentum was already pointing to a sluggish start to 2020, well before the coronavirus outbreak that has suddenly cast a huge shadow over the world economy.
Latin America’s largest economy grew by 0.5% in the fourth quarter, statistics agency IBGE said, in line with the median forecast in a Reuters poll of economists and slightly slower than 0.6% in the preceding quarter.
Compared with the same quarter of the preceding year, Brazil’s economy grew 1.7%, faster than the median estimate of 1.5% in a Reuters poll and the 1.2% pace in July-September.
The main contributors to fourth-quarter growth were a 0.2% rise in industrial output and a 0.6% increase in services. Net trade was also positive, with exports rising 2.6% and imports falling 3.2%, while government spending rose 0.4%.
The biggest drags on growth were a 3.3% fall in fixed business investment, and a 0.4% decline in agribusiness activity, IBGE said.
The 1.1% growth in 2019 was lower than the 1.3% registered in both 2017 and 2018.
With the expected damage from the coronavirus outbreak now compounding the weak “carry over” effect from late last year, economists are slashing their forecasts for this year to below 2%, with some not ruling out the possibility of a mild recession.
The rapidly deteriorating economic outlook is likely to pile the pressure on President Jair Bolsonaro and his all-powerful Economy Minister Paulo Guedes.
(Reporting by Jamie McGeever; Editing by Kevin Liffey and Bernadette Baum)
