Brazilian economy shrinks in third quarter, reports note
Copyright © 1998 Nando Media
Copyright © 1998 Reuters News Service
RIO DE JANEIRO (November 18, 1998 6:04 p.m. EST nandotimes.com) - Brazil's economy retracted in the third quarter, reports said
Wednesday, spelling further trouble for Latin America's economic powerhouse, which is already reeling from global financial turmoil.
Hurt by sky-high interest rates and weak demand, gross domestic product fell 1.5 percent in the quarter from the second quarter, the
biggest drop since the 1995 Mexican currency crisis, the National Statistics Institute said. GDP is the broadest measure of a nation's
economy.
A separate report from Brazil's central bank showed the country's huge budget deficit narrowed in August, but few investors or
policymakers were celebrating since the data did not reflect the full impact of the current economic crisis.
Indeed, the budget deficit would have been wider if not for a one-time infusion of funds from the sale of government assets, economists
said.
"Despite the results being slightly better than we expected, it doesn't change the serious situation of the country's public accounts," Odair
Abate, chief economist at Lloyds Bank in Sao Paulo, said. "The numbers are still bad enough and the fiscal adjustment program is still
essential." |
