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Official data released on Friday in Brazil and India paired the two BRICS members in opposing ends of the spectrum, with India witnessing a spurt in growth and Brazil officially slipping into recession.
In Brazil, government statistics agency IBGE unveiled data on Friday that showed gross domestic product contracting 0.6 per cent from the first quarter. It also lowered its estimate for first-quarter activity to a 0.2 per cent contraction.
“This result was below expectations,” said Brazilian Finance Minister Guido Mantega but added, “”Things have not improved on the international front and that is not helping most countries.”
“I believe we should not be talking of recession … salaries are on the up and the consumer market is expanding,” he added.
Brazil managed to create 500 thousand jobs in the first semester, the Finance Minister claims.
“In my opinion, talking about Brazilian recession is incorrect. A recession is a prolonged period of stagnation, like the one experienced by European countries, and takes place when there’s unemployment,” said Mantega.
The GDP data could dampen the re-election campaign of President Dilma Rousseff. Brazil goes to polls in October.
Later on Friday, Rousseff promised that economic performance during the second half of the year would be “better.”
Meanwhile, India’s economy grew 5.7 per cent in the April-June quarter, highest in the past two-and-a-half years. The new Indian government which took charge in the last week of May this year has promised to revive growth.
According to data released in New Delhi on Friday by India’s Central Statistics Office, the manufacturing sector recorded a growth of 3.5 per cent in the first quarter of 2014-15 as against a contraction of 1.2 per cent in Q1, 2013-14.
The mining sector too grew by 2.1 per cent in April-June quarter compared a decline in production by 3.9 per cent the year-ago period.
The highest growth rate during Q1, 2014-15 was recorded by financial services sector at 10.4 per cent, followed by electricity gas and water supply at 10.2 per cent.
Indian industry bodies were buoyed by the data.
“It (the GDP) will only pick up further and the Indian economy is well poised to reach six per cent or may even cross the six per cent mark for the full financial year 2014-15,” said Rana Kapoor, President of Associated Chambers of Commerce and Industry in India.
TBP and Agencies