As reported, Brazil's national statistics institute said Friday GDP shrank 0.6 percent in the second quarter and revised an initially positive first quarter growth estimate down to -0.2 percent. Coming ahead of October presidential and general elections, the figures will damage already low industrial and consumer confidence in what once was a fast-growing regional powerhouse.
The contraction comes with Rousseff fighting to win re-election, as the latest polls show a major surge in support for ecologist Marina Silva.
This is affected from External factors too, Polls this week show her defeating Rousseff in an October 26 run-off, although the latter remains favorite to top first round voting on October 5.
"The data are likely to be seized upon by Dilma Rousseff's challengers to attack her poor record on growth and inflation," said Robert Wood, Brazil analyst for the Economist Intelligence Unit.
"It is unlikely that the government will announce any new measures to breathe life into the economy," he added.
Minister of Finance Guido Mantega insisted external factors were largely behind the poor statistics and forecast a swift return to growth.
"Things have not improved on the international front and that is not helping most countries" Mantega said in Sao Paulo.
"This result was below expectations (but) I believe we should not be talking of recession ... salaries are on the up and the consumer market is expanding," he said
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