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FGV forecasts a 0.1% drop in GDP for the 3rd quarter

A projection made by Fundação Getúlio Vargas (FGV), at the request of CNN, points out that the Gross Domestic Product (GDP) of Brazil should fall 0.1% in the third quarter of this year, compared to the previous three months.

The estimate was prepared by specialists at the foundation this Tuesday (1), on the eve of the official publication to be carried out by the Brazilian Institute of Geography and Statistics (IBGE) this Wednesday (2).

TO CNN, specialists point to ‘political uncertainties’ as the main factor for the Brazilian economic stagnation between July and September.

The FGV economist, Cláudio Considera, highlights that the stability of the index demonstrates a ‘weak’ recovery of the country’s economy. “The practically stable result presented by the indicator shows a slow recovery of the Brazilian economy. The positive side is that we are producing more than the same period last year, that is, we are improving. But political uncertainties, together with the Covid-19 pandemic, make us register a very weak recovery”, highlights the FGV researcher.

For the IBGE release this Wednesday (2), the market expects the country to enter the so-called “technical recession”. The term refers to the situation in which the GDP — the sum of all the wealth produced in the country — for two consecutive quarters is negative. This is because in the second quarter of 2021, the indicator also registered a decrease of 0.1%, compared to the first quarter of the year.

Specialists interviewed by CNN point out that Brazil is experiencing stagflation – the absence of economic growth in a scenario of high inflation, which records an accumulated increase of 10.67% in 12 months.

Sergio Valle, economist and partner at MB Associados, reinforces the current scenario. “It is an idea of ​​stagnation because the drop in GDP will be small, if it occurs. [O valor será] around zero. It’s more of a stagnation than a recession properly”, highlights the economist.

*With João Pedro Malar, from CNN Brasil Business

Reference: CNN Brasil

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