Brazil's GDP grows in Q1; president sees recession's end

Markets Associated Press

Brazil's gross domestic product expanded 1 percent in the first three months of this year, the first time in eight consecutive quarters that the economy has grown, the government's statistics bureau said Thursday.

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The IBGE bureau said record grain harvests had boosted the economy, with the agricultural sector expanding 13.4 percent.

Shortly after the announcement, President Michel Temer tweeted that the country's worst recession in decades is over.

"Brazil has defeated the recession," Temer said in a later statement. "The figure released today marks the rebirth of Brazil's economy anchored in a solid and sustainable base."

Finance Minister Henrique Meirelles called it a "historic day" for Brazil. "After two years, Brazil is leaving behind the worst recession in its history," he said in a statement. "There is still much to be done to reach full recovery, but we are heading in the right direction."

The data compiled by IBGE had some less cheery news. The first quarter GDP was still 0.4 percent below the level a year earlier. The services sector remained flat and manufacturing grew only 0.9 percent.

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Economist Affonso Celso Pastore, a former president of Brazil's Central Bank, told the newspaper O Estado d S. Paulo that it was "extremely premature" to say that 1 percent GDP growth represented the end of the recession. He said that without the growth in agricultural, "GDP would not have expanded 1 percent, but 0.2 percent."

"Indicators for industrial output and retail sales in the next quarter point to a weakened economy, meaning there is a big chance that GDP will contract in the second quarter," he said.