By Jeffrey T. Lewis
SAO PAULO--Brazil's economy bounced back in the third quarter, expanding at a rapid pace following the steep contraction in the second quarter that was caused by the shutdowns of non-essential businesses due to the coronavirus pandemic.
Gross domestic product increased 7.7% in the three months through September and contracted 3.9% from the same quarter in 2019 the Brazilian Institute of Geography and Statistics, or IBGE, said Thursday. In the second quarter, GDP shrank a revised 9.6% from the first quarter and contracted a revised 10.9% from a year earlier.
Brazil's government approved payments to help the country's poorest residents early in the pandemic, temporarily lifting millions out of poverty and boosting consumer spending, especially as businesses began to reopen after April. Retail sales and industrial production rebounded as a result, with both showing growth from a year earlier in recent reports.
"It's as close to a v-shaped recovery as you're going to see in Latin America," said Gustavo Rangel, an economist at ING. "The emergency aid certainly helped keep consumption in a favorable trajectory, and we see retail sales are booming."
Brazil's industrial sector expanded 14.8% in the third quarter from the second and contracted 0.9% from a year earlier, while consumer spending grew 7.6% in the quarter and shrank 6% from a year earlier, the IBGE said. Government spending increased 3.5% in the quarter and contracted 5.3% from a year earlier. Gross fixed capital formation, a measure of investment spending, grew 11% in the quarter and shrank 7.8% from a year earlier.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com
(END) Dow Jones Newswires
12-03-20 0734ET
