Brazil reports disappointing economic growth

Brazil yesterday reported much slower economic growth in the third quarter than forecasters expected, adding to pressure on president Dilma Rousseff to make deeper structural reforms and adding to fears that the emerging markets were suffering in the global slowdown.

The economy registered only 0.6 per cent growth from the second quarter, according to government statistics agency IBGE. This came to only half the pace expected by financial markets.

The Latin American nation has been stuck in a pattern of slow growth since Rousseff's assumption of office last year, with companies struggling on high costs and severe infrastructure and labour bottlenecks. Rousseff has implemented numerous tax cuts and other stimuli to revive growth but yesterday's data showed companies were not responding, as investment declined in the fifth straight quarter

The Brazilian economy's troubles are expected to sweep across global markets, with India too posting lower-than-expected growth, on track to its worst showing in a decade.

Russia's economy was also slowing down, with expectations of growth at 3.2 per cent next year, according to a separate Reuters poll published yesterday. China, Brazil's biggest trading partner, is set to post its slowest annual expansion in 13 years.

The data, released yesterday, saw Brazil's currency and stock markets dip, renewing concerns its slow growth was not a cyclical issue but the result deep structural problems after strong growth in the previous decade.