Brazil GDP Grew 0.6% in Q3, Half the Expected Rate

November 30, 2012 11:56 AM EST
Brazil's GDP grew in the third quarter, but at half the rate expected by most.

According to Brazil's Instituto Brasileiro de Geografia e Estatística (IBGE), GDP rose 0.6 percent, versus 1.2 percent of growth estimated in a Bloomberg survey of economists.

Brazil has responded to the slowdown with rate cuts, it's latest move to keep the Sistema Especial de Liquidação e Custodia (SELIC) rate flat at 7.25 percent ended the second-longest streak of cuts in the country's history. The move caused an unexpected affect on GDP, with falling bank spreads not being offset by an increase in credit volume.

On an annualized basis, growth came in at 2.4 percent as the government reduced both first and second-quarter GDP estimates. Brazilian officials had forecast growth of 4.7 percent for 2012 earlier in November.

Brazilian finance minister Guido Mantega said expectations are for accelerated growth in the fourth quarter, currently modeling a 1 percent rise.

For 2013, Brazil's growth outlook is maintained at 4.0 percent.

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