SAO PAOLO (Reuters) — Brazil's economy suffered a recession in the first half of the year, government data showed on Friday, dealing a major blow to President Dilma Rousseff's already diminishing hopes for reelection in October.


Latin America's largest economy has suffered slow growth for more than three years under Rousseff's left-leaning policies, which have diminished consumer and business confidence and caused heavy losses for financial investors.

The economy took an even bigger downturn in the second quarter, contracting 0.6 percent from the first quarter, according to government statistics agency IBGE. The agency also revised down its estimate for first quarter activity to a 0.2 percent contraction, meaning the economy entered a recession.

Civil construction and manufacturing especially suffered during the second quarter, data showed. Brazil hosted the World Cup in June and July, which caused a slowdown at many factories and retailers as cities declared public holidays on game days to prevent logistical problems such as heavy traffic.

The second-quarter contraction was worse than expectations of a 0.4 percent contraction, according to the median forecast of 47 analysts polled by Reuters.

Brazil's most recent recession ran from late 2008 through early 2009, during the global financial crisis.

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