Petrobras crisis behind GDP contraction
Petrobras headquarters in Rio
Petrobras's nearly 40% investment cut for this year is the main underlying factor behind Brazil's economy contraction in 2015, according to a study released Wednesday (Oct. 21) by the Finance Ministry's Economic Policy Secretariat (SPE).
The document said the state-controlled oil company's investment reduction from $37.1 billion in 2014 to $25 billion in 2015 will account for at least 2 percentage points in the contraction of the Gross Domestic Product (GDP). Officially, the SPE expects the GDP to shrink 2.44%.
According to the secretariat, Petrobras's investment cuts will result in a GDP shrink of 0.6 percentage points as a direct effect alone. Considering the indirect effects (impact on suppliers and companies related to the oil industry) and the falling incomes of the impacted population, the reduction rises to 1.7 percentage points.
But taking into account the impact of the total investment reduction of Petrobras contractors in areas other than oil and gas, the adverse effect on the economy rises to at least 2 percentage points. According to the study, the Petrobras crisis was of much greater consequence for the economic downturn than tax increases announced this year.
According to the SPE, Petrobras has such significant weight on Brazil's economy because of its large investments. From 2010 to 2014, the company accounted for 8.8% of all investments in the country, a figure equivalent to 1.8% of GDP.
Translated by Mayra Borges
Fonte: Petrobras crisis behind GDP contraction
