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Brazil exits recession, but faces tough year

RIO DE JANEIRO (AFP) – Brazil exited recession in the fourth quarter, the government said on Friday, though weak growth and high inflation still dog Latin America’s biggest economy as President Jair Bolsonaro gears up to seek re-election in October.

Gross domestic product (GDP) grew 0.5 per cent for the period from October through December, reversing its 0.3-per-cent and 0.1-per-cent contractions in the previous two quarters, said the national statistics institute, IBGE.

That brought GDP growth for 2021 to 4.6 per cent on the year, erasing the economy’s painful contraction in pandemic-battered 2020, which was revised to 3.9 per cent. But the economy remains a headache for far-right leader Bolsonaro, with growth still weak and inflation hitting Brazilian households hard.

Uncertainty fuelled by Bolsonaro’s expected election showdown with leftist ex-president Luiz Inacio Lula da Silva and international turmoil around Russia’s invasion of Ukraine will likely weigh heavily on the Brazilian economy this year, analysts said.

“2022 is a difficult year due to both internal and external factors,” said economist Gilberto Braga of business school IBMEC in Rio de Janeiro.

“Uncertainties around the country’s political future are making things unpredictable and will delay strategic decisions on the economy… And external issues will weigh down global GDP, and Brazil’s along with it,” he told AFP.

Weak growth and high inflation still dog Brazil. PHOTO: AFP

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