The preliminary results of Fundação Getulio Vargas’ Economic Activity Indicator (IAE-FGV) point to a record contraction of 11.2% in the second quarter of this year, compared to the first quarter. Although economic activity expanded 0.7% in June, after increasing in May as well, the sharp drop in April dictated the quarter’s negative performance.

Year-over-year, the second-quarter decline in activity was also a record, of 11.7%. In June, activity shrank 9.4%, year-over-year – a better result than the 12.7% decline recorded in May. In the 12 months to June, the indicator decreased 2.2%, while in the first half of this year, it fell 5.8%.

IAE-FGV is an indicator that anticipates trends in the Brazilian economy based on the three main monthly activity surveys conducted by the national statistics agency, IBGE. The principal sources of information used to update the indicator are the Monthly Industrial Survey – Physical Production (PIM-PF), Monthly Trade Survey (PMC) and Monthly Services Survey (PMS).

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