Brazil GDP Contracts in 3Q11

choi

(1) Joe Leahy and Stefan Wagstyl, Brazilian Growth Shudders to a Halt; Emerging markets' vulnerability exposed; Slowdown in developed economies takes toll. Financial Times, Dec 7, 2011 (front-page top article).

Paragraphs 1 and 3:

"Brazil's economy stalled in the third quarter of this year, demonstrating the vulnerability of the world's emerging market growth engines to the slowdown in the developed world.

"Gross domestic product contracted 0.04 per cent in the three months ending on September 30 compared with the previous quarter as weakness in industrial sector spread to Brazil's once vibrant consumer sector.

My comment:
(a) There is no need to read the rest of the following report.

Alexander Ragir, Brazil’s Economy Contracts as Rousseff Cuts Taxes, Rates to Boost Demand. Bloomberg Dec 6, 2011
http://www.bloomberg.com/news/20 ... of-euro-crisis.html

Quote:

"Gross domestic product contracted 0.04 percent from the previous three months * * * The contraction, the first since the first quarter of 2009, is equivalent to an annualized decline of 0.17 percent.

"The annualized fall in GDP was led by a 3.4 percent contraction in industry and a 1.06 percent decline in services. Agriculture expanded at an annualized pace of 13.56 percent, while a 7.41 percent jump in exports prevented a deeper contraction. The strength of exports is unlikely to be sustained with China’s economy slowing and Europe falling into recession, said Neil Shearing, an emerging markets economist at Capital Economics Ltd in London.

(b) Previously Brazil ESTIMATED 3Q11 would have expanded a little more than 2Q11, which was 0.8% annualized rate.

Arnaldo Galvao, Brazil’s Economy Expands at Slowest Pace in 10 Quarters. Bloomberg, Nov 24, 2011
("Gross domestic product grew 0.3 percent from the previous three months, according to an estimate given to Congress today by the Finance Ministry in Brasilia. That’s equivalent to annualized growth of 1.2 percent")
(c) Annualized? That is about four times as big as actual quarterly number.


(2) Joe Leahy and Samantha Pearson, Brazil's Consumers Go to Ground; Falling domestic demand is adding to problems caused by the strong real. Financial Times, Dec 7, 2011, at page 4.

The first 3 paragraphs:

"Marco Tronchetti Provera, chairman and chief executive of Italian tyre maker Pirelli, leaves no doubt about why companies with factories in Brazil are hurting.

"The tyre producer, which derves a third of revenues from Latin America, is battling what it calls 'dumping' of cheap and low-quality imports from Chinese and south Koreanproducers in the region, particularly Brazil. This, he says, is forcing mnufacturers to reconsider their growth and investment strategies,

"'For all local producers any plan of growth is under discussion because of these distortions,' said Mr Tronchetti Provera, who was in  São Paulo for the recent Formula One race, where the company is the official supplier.

Note:
(a) There is no need to read the rest of the report.
(b) go to ground
http://en.wiktionary.org/wiki/go_to_ground
(c) Pirelli
http://en.wikipedia.org/wiki/Pirelli
(founded by Giovanni Battista Pirelli in 1872; based in Milan; world’s fifth largest tyre manufacturer)