People walk on Barra da Tijuca beach during the coronavirus disease (COVID-19) outbreak in Rio de Janeiro, Brazil, May 27, 2020. REUTERS/Ricardo Moraes
May 29, 2020
By Jamie McGeever
BRASILIA (Reuters) – Brazil’s economy contracted in the first quarter by the most in nearly five years, data showed on Friday, as the coronavirus outbreak slammed the brakes on a fragile recovery and pushed the country toward recession.
The pandemic triggered a 1.5% drop from the prior quarter, according to government statistics agency IBGE, as household consumption fell the most since 2001. The outbreak is expected to wreak even greater damage in the second quarter.
The outlook for Latin America’s largest economy this year has darkened dramatically, with a Reuters poll of economists showing a record 6.3% drop in gross domestic product (GDP).
The 1.5% contraction in the January-March period, in line with the median estimate in the Reuters poll, was the biggest quarterly drop since the second quarter of 2015.
Economic activity retreated 0.3% from a year earlier, to the same level as the second quarter of 2012, IBGE said.
With GDP seen falling a record 12.7% in the second quarter in annual terms, according to the Reuters consensus, Brazil is heading for one of its worst recessions ever.
That is likely to pile pressure on President Jair Bolsonaro, whose popularity has suffered from his handling of the exploding COVID-19 outbreak in Brazil, second only to the United States with nearly 440,000 confirmed cases.
(Reporting by Jamie McGeever; Editing by Brad Haynes)
