Argentinean crisis cuts 0.5 points off Brazilian GDP, shows FGV IBRE study
The crisis in Argentina is having a strong impact on Brazil’s gross domestic product. According to a study by economists Luana Miranda and Mayara Santiago of the FGV´s Brazilian Institute of Economics (FGV IBRE), the crisis in the neighboring country will reduce Brazil’s GDP by 0.5 points this year, to around 1.1%.
The reason is the 40% drop in Brazil’s exports to Argentina in the first eight months of 2019 in relation to the same period of last year.
If it weren’t for the Argentinean crisis, Brazilian GDP could have grown 1.6% by the end of 2019. Roughly 90% of Brazil’s exports to Argentina are industrial goods, and in turn 57.4% of them are inputs (intermediate goods) used by Argentinean manufacturers.
Read more in IBRE’s blog.