Brazil’s economy contracted more than analysts forecast in the second quarter, as tighter monetary policy and faster inflation torpedoed confidence and caused activity to nosedive.
Gross domestic product contracted 1.9 percent in the second three months of the year from the previous quarter, the national statistics agency said in Rio de Janeiro on Friday. That was the biggest contraction in more than six years, and worse than the median estimate of a 1.7 percent fall from 41 economists surveyed by Bloomberg.
Latin America’s largest economy is suffering from multiple woes: borrowing costs at their highest since 2006, inflation at more than double the target, rising unemployment, a crumbling currency and a corruption scandal that could unseat President Dilma Rousseff. The government has also chopped investment as part of its effort to fortify fiscal accounts and avoid a sovereign downgrade to junk.
Brazil Energy Insight 
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