Brazil’s Economy Shrinks, So Does Consumer Confidence

    Brazil’s Gross Domestic Product (GDP) went down in the third quarter of this year for the first time since the first quarter of 2003.

    The data released today by the Brazilian Institute of Geography and Statistics (IBGE) show that the sum of goods and services produced in the country dropped 1.2% in the period between July and September in comparison with the second quarter of the year.

    Nevertheless, when compared with the third quarter of 2004, the third-quarter results represent a 1% improvement.

    From January to September, the country’s economy grew 2.6% in relation to the same period last year.

    The IBGE informs that the third-quarter 2005 results, in comparison to the previous quarter, evidence the impact of lackluster performances in agriculture, which registered a 3.4% decline, and industry, which was off 1.2%. The service sector held steady.

    Less Confident Consumer

    The latest survey of Consumer Confidence Brazil’s Getúlio Vargas Foundation found that the index fell from 104.2 in October to 102 in November.

    There was also a drop in the Expectations index, going from 106.1 in October to 104.1 in November.

    However, when asked to evaluate the economic situation, consumers had a better opinion of it in the latest poll than in October.

    In October, 10.6% of those interviewed said the economic situation was good; in November that rose to 11.1%. And in October, 47.7% of those interviewed said the situation was bad; while in November only 46.5% said it was bad.

    The survey interviewed 1,969 people in Brazil’s main cities between November 1st and 22.

    ABr

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