Tuesday June 9, 03:07 PM
Brazil officially in recession
RIO DE JANEIRO (AFP) - Brazil's economy entered recession as its gross domestic product fell 0.8 percent in the first quarter, the government announced Tuesday.
The drop followed a 3.6 percent decline in output in the fourth quarter of 2008, which officials said means Brazil's economy now meets the widely accepted definition of recession: two consecutive quarters of economic contraction.
Last month, Industry Minister Miguel Jorge admitted Brazil was in a "soft recession" -- confounding previous government assurances that such a prolonged contraction would not occur.
The report by the Brazilian Geography and Statistics Institute is the latest downbeat economic news for Latin America's biggest economy, after recent statistics showed that unemployment has reached nine percent, the highest in two years.
On Monday Finance Minister Guido Mantega warned Monday that the first quarter GDP "would certainly be negative." The measurement proved to have fallen 1.8 percent overall in the first quarter compared to the same period last year.
The BGSI also said however that the country's GDP remained in the positive for part of the time, at plus 3.1 percent in March compared to March 2008.
The official marker was expected by economists, and the decline was shallower than feared. Experts had predicted a first quarter fall of 1.0-2.5 percent.
"What is important is that this (recession) is behind us and the Brazilian economy is already showing signs of recovery," insisted Mantega.
On Thursday the Febrarban banking federation announced that the number of credit cards in circulation in Brazil had soared 327 percent over the past eight years.
The triple-fold increase in consumer plastic paralleled the growth of Brazil's economy, one of the most dynamic in the emerging world along with China and India.
There are 124 million credit cards in Brazil, which has a population of 190 million, Febraban said.
The total value of credit card transactions last year was 215 billion reais (110 billion dollars). Each holder spent an average 140 reais (70 dollars) per month on his or her card.
The number of bank accounts has also doubled between 2000 and 2008, and Internet banking has become increasingly common, the federation said.
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