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Brazil’s economy unexpectedly contracted in the second quarter, leading economists to revise down their 2021 growth estimates as fiscal threats and a water crisis loom on the horizon.
Gross domestic product decreased 0.1% from the previous three-month period, compared with a 0.2% growth estimate in a Bloomberg survey. Only three of the 39 economists surveyed expected a negative number. From the year prior, the economy expanded 12.4%, the national statistics agency reported on Wednesday.
As the vaccination campaign advances with more than 60% of the population partly immunized, most businesses have resumed activities and services prices are picking up. Yet the informal labor market remains sluggish and consumer confidence won’t recover as fast as expected.
Investments fell 3.6% on the quarter, while agriculture dropped 2.8% and industry…