A 0.1% drop in GDP is a “bucket of cold water” for Brazil, says economist

The 0.1% decline in GDP in the last quarter is a “bucket of cold water” for the country, despite the expected drop, is what Fecomercio’s economic advisor, Guilherme Dietze, said in an interview with CNN Radio this Thursday (02).

The table released by IBGE on Thursday configures a “technical recession”, when there is a fall for two consecutive quarters. Even so, Dietze said she should be looked at with caution.

“Recession happens when there is a consolidated trend,” said Dietze. Although the moment points to this situation, he stated that there is an oscillation and that this situation can be reversed.

“The economy grows, falls, grows again. The pandemic brought instability, it is not known how the Ômicron variant will reach the pandemic, the oscillation shows us that the situation is beyond the economics books”, he said.

The GDP result was driven by the 8% drop in the agricultural sector. “We suffered the biggest water crisis in the last 90 years, the drought problem, was the one that most pushed the negative result.”

Framework for 2022

The Fecomercio advisor assesses that next year will be challenging, with “weaker growth” due to high interest rates, inflation and the electoral period: “There are several factors that make the path forward difficult, this is bad. There is a lack of investment and we need it to generate employment and increase income.”

The economist says that growth should be 4.5% this year, with next year close to stability, with successive downward revisions, which alienates investors. “Imagining that decisions will only be taken in 2023 is very delicate, it generates a domino effect for the economy.”