The economy of Brazil, now under the control of socialist leader Lula da Silva, entered into negative territory in the third quarter (Q3) according to central bank data.

Brazil, the largest country in Latin America, saw a reversal of its positive upward turn that had been the result of a booming farming sector. But its national economic index and key measure of gross domestic product (GDP), IBC-BR, showed a seasonally adjusted 0.64 decline in Q3.

This follows from a 0.06 percent decline in September compared to August. Economists polled by Reuters thought Brazil would see 0.2 percent growth during the same period.

The “very poor” third quarter has been attributed to high borrowing costs and declining commodity prices by Brazilian Finance Minister Fernando Haddad, who predicted the decline. Haddad said these factors, which are noticeably worse than where they were this time last year, would heavily affect corporate performance and thus tax revenue.

There was also a negative performance reported in the service sector, which comprises 70 percent of the economic activity of Brazil. This was reported by Nova Futura economist Nicolas Borsoi, who said: “There is now a downward bias to our forecast of a 0.2 percent GDP drop in the third quarter. My perception is that the fourth quarter will be even worse. For now we’re sticking to our 3 percent growth forecast for the year, but 2.8 percent seems likely as well.”

Luiz Inácio Lula da Silva won a presidential election against Jair Bolsonaro in October 2022, leading him to be sworn into office for the third time in January 2023. Lula had been released from prison only three years earlier after doing 12 years for corruption charges following his first two terms as president.

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Lula recently condemned Israel for the way it is carrying out its war on Hamas. He described the Jewish state as “committing terrorism” in the Gaza Strip.

“Israel’s attitude toward children, toward women, is the equivalent of terrorism. There’s no other way to put it,” Lula said during his weekly social media presser. “If I know a place is full of children, even if there’s a monster inside, I can’t kill the children just because I want to kill the monster.”

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