LatinNews Daily - 1 June 2020

* Brazil’s national statistics institute (Ibge) has released figures for first quarter GDP growth, which shows that Brazil’s economy contracted by 1.5% in the first three months of 2020, compared with the previous quarter. In annual terms, Q1 GDP contracted by 0.3%. The agricultural sector expanded 0.6% quarter-on-quarter, while the industrial and services sectors contracted by 1.4% and 1.6% respectively. Household consumption fell by 2%. The Ibge notes that GDP results were “affected by the [coronavirus] pandemic and social distancing”, which began to significantly impact activity in the last fortnight of the first quarter. Commenting on this contraction in first quarter GDP, the economy ministry notes that it interrupts Brazil’s trajectory of economic recovery begun in 2017, that economic performance will worsen in Q2, and that the country must prepare itself for the quadruple challenges of unemployment, increased poverty, bankruptcies, and strain on the credit market.  

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