BRASILIA: Brazil’s economy exited recession with growth of 0.1 percent in the third quarter, the government said yesterday, a tepid result that is nevertheless welcome news for struggling President Dilma Rousseff.
The data came a day after Rousseff, who has battled to reignite growth in the world’s seventh-largest economy, named a new economic team featuring market-friendly bank executive Joaquim Levy as finance minister.
The government statistics institute said the manufacturing sector, in particular, had begun to grow in the third quarter, bouncing back from its slowdown.
The services sector has also started to expand, it said.
However, compared with the same quarter last year, GDP was still down 0.2 percent in the third quarter.
Brazil’s economy contracted by 0.2 percent in the first quarter and 0.6 percent in the second, officially entering recession.
The malaise forced Rousseff onto the defensive as she waged a hard-fought re-election battle last month.
Fending off opponents’ attacks of her economic record with promises to take a new policy direction, she narrowly won a new four-year term, which starts in January.
The president is deeply unpopular with the business community and markets, not least owing to heavy government intervention in economic policy.
Her government is also mired in a huge corruption scandal at state-owned oil giant Petrobras, which has already led to the arrests of a clutch of top businessmen amid claims that dozens of politicians, chiefly Rousseff allies, received massive kickbacks on contracts.
Levy’s appointment as finance minister was a clear effort to woo back the confidence of the financial community. Nicknamed “Scissorhands” for his steely budgetary management, he was previously chief executive officer of Bradesco Asset Management (Bram), part of Brazil’s second-largest private bank.
Rousseff also named former deputy finance minister Nelson Barbosa as planning minister.
Central bank chief Alexandre Tombini kept his post through the shake-up.
Analysts downplayed the significance of Friday’s growth figures, saying any real change in direction would depend on the new economic team.
“This figure is practically flat. We can’t say it’s recovering, but we also can’t say it’s falling,” said Leandro Martins, a consultant at Walpires Corretora in Sao Paulo
“We have to wait and see what the new economic team is going to do going forward,” Martins added.
AFP
