Brazil officially entered into recession in the first quarter of 2009, but the contraction was less severe than many had feared. Favorable signs are already emerging and some analysts predict that the economy will be back to modest growth levels by the end of the year.
The Brazilian economy fell by 1.8 percent in the first quarter of 2009 in a year-over-year basis, according to the country’s statistics agency. The seasonally adjusted annual rate fell 3.2 percent in the first quarter, which is significantly better than the previous quarter’s fall of 13.6 percent.
Itau Securities released information about their predictions for the Brazilian economy, noting that “Brazil’s better result suggests a stronger inventory adjustment earlier on, and a resilient domestic economy.” A large part of the positive news from the first quarter came from consumer spending, which actually grew during the first quarter by 1.5 percent.
Brazil’s Finance Minister Guido Mantega, speaking to reporters and analysts in a conference call recently, said that there are strong signs that the economy will be able to see a mild recovery by the end of 2009. The Brazilian government has implemented a number of official measures to help the economy, including tax cuts and incentives for buying automobiles and appliances.
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