Brazil released its latest GDP numbers this morning and they are dismal. Growth contracted for a second straight quarter in the three months that ended in June—after first-quarter numbers were revised to show a decline as well. That means, by the conventional definition of two consecutive quarters of contraction, Brazil is in recession.
Economic output declined at a 0.6% annualized rate in the second quarter, after the first quarter was revised to a contraction of 0.2%. The second-quarter decline came even amid the surge of activity in the run-up to the FIFA World Cup.
The event—which cost more than $11 billion—kicked off in June. But even government spending on the tournament—which has helped to fuel discontent in the country—couldn’t push Brazil’s economy into expansion during the quarter. And that will make President Dilma Rousseff’s effort to win re-election in October all that much more difficult.