Anemic 3rd quarter growth dissapoints in Brazil


Rio de Janeiro (AFP)

Brazil's economy grew 0.1 percent in the third quarter of 2017, the third consecutive quarterly increase in output but below expectations, official figures out Friday showed.

A Bloomberg survey of 31 economists ahead of the figures released by the IGBE state statistics office predicted a 0.3 percent growth over the previous quarter.

Friday's figures, however, show a 1.4 percent growth when compared to the third quarter of 2016.

After years of torrid growth, Brazil sank into its worst recession in history, which saw GDP shrink 3.5 percent in both 2015 and 2016. (The IGBE on Friday revised the 2016 figure down from 3.6 percent).

Updated IGBE figures also show that Brazil's economy grew 1.3 percent in the first quarter, and 0.7 percent in the second quarter.

In the first nine months of 2017, the economy grew 0.6 percent compared to the same period in 2016, figures showed.

Market traders are expecting a 0.73 percent growth rate in 2017, and a 2.59 percent growth in 2018, according to the latest Central Bank survey.

The weak third quarter growth rate has political consequences ahead of the unpredictable October 2018 presidential and legislative elections.

So far, polls have been dominated by leftwinger Luiz Inacio Lula da Silva, a two-term ex-president who has been convicted of corruption. Some way behind him in second place is rightwing firebrand and former army officer Jair Bolsonaro.

Brazil's deeply unpopular president, Michel Temer, will not be running for office.

The mood is firmly anti-establishment. But if the economy recovers enough, analysts say, voters might be less keen to go for radical options.

They might instead put their faith in more centrist candidates espousing a continuation of market reforms that Temer pushed.