Brazil's economy shrinks 3.8 pct in 2015, worst growth in 25 years

Brazil's economy shrank 3.8 percent in 2015, marking its worst performance in 25 years, the state statistics institute (IBGE) reported Thursday.

"The rate of -3.8 percent is the lowest ... since 1990," when the economy contracted 4.3 percent, said INGE's Rebeca Palis La Rocque, according to Brazilian news network Globo.

Latin America's largest economy saw gross domestic product (GDP) contract by 1.4 percent in the fourth quarter last year, capping nine previous months of negative growth.

According to IBGE, Brazilian goods and services generated a total of 5.9 trillion reais (some 1.51 billion U.S. dollars) in 2015.

Per capita GDP registered 28,876 reais (7,425 dollars), or 4.6 percent less than in 2014.

"Only the agricultural sector grew in 2015," expanding 1.8 percent, driven by an increase in soy (11.9 percent) and corn (7.3 percent), Globo said.

Still, agricultural performance was the worst since 2012, when it fell 3.1 percent.

The services sector shrank 2.7 percent compared to the year before, and the industrial sector contracted 6.2 percent, affected by a nearly 8 percent contraction in construction.

"Construction dropped significantly," La Rocque said, due to lower activity in both infrastructure building and real estate.

The construction sector dipped 7.6 percent and manufacturing, 9.7 percent, driven down by lower automobile, machinery and electric appliance production.

Oil, gas and mining fared better, "helping to cushion the fall" in economic activity, said the news agency.

In general, the numbers show economic growth has come to a "sudden standstill," the IBGE indicated.

After hitting 7.6 percent growth in 2010, Brazil's GDP took a nosedive in 2011 (3.9) and has been more or less sliding since -- 1.9 percent in 2012, 3 percent in 2013, and 0.1 percent in 2014.

In 2015, the government registered a fiscal deficit of some 111.2 million reais (28.6 million dollars), the highest deficit since 2001.

Brazil's economic contraction has been accompanied by a rise in unemployment, inflation and the benchmark interest rate (14.25 percent annually), and tighter credit.

The three leading credit rating agencies -- Fitch, Standard & Poor's and Moody's -- have downgraded Brazil from investment grade. Enditem