Brazil’s economy stalls in third quarter

Brazil’s economic growth stalled in the third quarter this year due to affects of the eurozone debt crisis, according to official statistics released on Tuesday.

Figures from the official IBGE agency showed that compared with the second quarter, Brazil’s GDP registered zero growth in the third quarter, standing at 1.05 trillion reais ($586.6 billion).

The agricultural sector registered a growth of 3.2 percent from the previous quarter. While the industrial and tertiary sectors registered negative figures, shrinking 0.9 and 0.3 percent respectively.

According to the IBGE, the contraction in the industrial sector was driven by a slowing manufacturing industry, which registered a 1.4-percent fall in the volume of added value. In the tertiary sector, trade and information services registered negative figures.

The government has revised down GDP forecast for the year to 3.5 percent. “It will be difficult to reach 3.8 percent of growth as we had forecasted,” Finance Minister Guido Mantega said.

The Brazilian economy continued a downward trend since the second quarter of 2010. In the last four quarters, the country’s GDP accumulated a 3.7-percent growth.

Despite a cooling economy, market confidence remains as the Brazilian government cuts interest rates and tax to stimulate domestic consumption and reduce the impacts of the global financial turmoil on its economy.

Chief of the International Monetary Fund Christine Lagarde said the Brazilian economy is solid, and the country is better protected than other countries against the affects of the eurozone crisis.

Finance Minister Mantega also said the zero economic growth in the third quarter is “temporary,” assuring that the economy will pick up in the last quarter of this year and the government will make efforts to spur growth.

The minister also predicted that the Brazilian economy will grow 4 to 5percent next year.