Weekly Report - 06 December 2005

BRAZIL | Shock at contraction of GDP. Some contraction of GDP (up to 0.5%) had been predicted between the second and third quarter, but when official figures were released on 30 November there was widespread shock at seeing a shrinkage of 1.2%, more than twice the worst expectation. It was the worst such result since the first quarter of 2003. The downturn has been explained as a combination of three factors: the still-astronomic interest rates, the impact of the continuing political crisis and adverse weather conditions affecting agricultural output.

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