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By Silvio Cascione
BRASILIA Nov 30 Brazil's economy plunged deeper
into recession in the third quarter, dashing the government's
hopes that a lift in consumer and business confidence would
bring a recovery after the impeachment of former President Dilma
Gross domestic product shrank 0.8 percent from the second
quarter after seasonal adjustments, statistics agency IBGE said
on Wednesday. That was in line with the median expectation of 37
economists in a Reuters poll.
Investments dropped sharply, frustrating hopes that a modest
increase in the previous quarter, the first in more than two
years, represented the beginning of a turnaround.
There were no bright spots as farmers, manufacturers and
service providers all reduced production, while families and
government agencies consumed less. Exports fell, following a 16
percent rise in the exchange rate year-to-date.
"This crisis is not like in 2008, when it was about
confidence," said Carlos Kawall, chief economist of Banco Safra
in Sao Paulo. "This time it's also about economic fundamentals -
the fiscal policy and companies' dire finances."
Brazil's disappointing economic performance since President
Michel Temer replaced Rousseff in May has led economists and
government officials to cut growth forecasts for 2017 to around
1 percent, although some analysts do not rule out a third year
of recession in what would be the nation's worst downturn ever.
Brazil's economy shrank 2.9 percent from the third quarter
of 2015, IBGE said.
(Additional reporting by Patricia Duarte and Rodrigo Viga
Gaier; Editing by Richard Lough and Lisa Von Ahn)