Brazil has slipped into a recession

Brazil has slipped into recession after official figures revealed that the country’s gross domestic product fell 1.9% in the second quarter of the year.

Year-on-year, second quarter growth was down 2.6 percent.

Analysts expected the Brazilian economy to contract, but the real figure was worse than expected.

In addition, the government statistics agency IBGE said that GDP actually dropped 0.7 percent in the first quarter, revised from an earlier estimate of a 0.2 percent fall.

Officials said that after two consecutive quarters of negative growth the country is officially in a recession.

The world’s seventh largest economy has been hit by falling commodity prices and lackluster global economic growth.

Investment in Brazil dropped by almost 12% in the second quarter compared to a year ago, according to Capital Economics.

Brazil’s national currency, the real, is down about 25% against the dollar so far this year.

Unemployment climbed up to 8.3 percent in the second quarter, up from 6.8 percent a year before, while inflation is forecast at 9.56 percent this year – twice the government’s target.

“Brazil is a strong country that will grow, will overcome the difficulties, which are momentary,” said President Dilma Rousseff in a speech inaugurating a public housing complex in the northeast.

“I know that we’re passing through difficulties. Many of you are scared, you think that we’re in an uncertain situation, you feel that inflation is still too high and you fear losing your jobs,” she said.

Adding: “We have conquered many things. We will not allow the country to go backwards.”