Rio de Janeiro (AFP) – Brazil’s ailing economy shrank again in the third quarter, with GDP falling 0.8 percent, the state statistics office said Wednesday.
The performance was slightly better than market expectations of a 0.9 percent drop, but was the seventh consecutive quarterly decline.
Brazil’s economy is in its deepest recession for decades and the country’s credit rating has been reduced to junk status by all three main international rating agencies.
However, center-right President Michel Temer, who took over this year after the impeachment of leftist president Dilma Rousseff, has vowed to introduce strong austerity measures to balance the books.
A first stage in the program — a 20 year budget freeze — was approved in an initial vote by the Senate late Tuesday. The austerity policies are running into resistance from unions and many public employees who say the measures will only make an already painful economic situation worse.
Latest jobs figures released Tuesday showed that 11.8 percent are unemployed, or about 12 million people.
The central bank was expected later Wednesday to cut its key rate by a quarter of a percentage point to 13.75 percent in a cautious bid to help stimulate the economy.
Inflation remains far above the government target at 7.87 percent but is slowly falling.
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