Global economic meltdown blamed for recession in Brazil

SAO PAULO -- Latin America's largest economy slumped into a technical recession during the first quarter after global demand for its products dropped dramatically, Brazil's government statistics agency said Tuesday.

The economy contracted 0.8% in the January-March period compared to the fourth quarter of 2008, when Brazil registered a 3.8% decline.

That put Brazil into a technical recession, defined as two consecutive quarters of negative growth.

First-quarter growth was down 1.8% compared to the same period a year earlier, when Brazil was riding an unprecedented economic boom.

The expansion ended abruptly last fall as the global financial meltdown hit hard, slashing demand for key Brazilian exports like iron ore, steel and agricultural products.

Yet Brazil's economy appears to be recovering faster than the economies of developing nations.

The benchmark Ibovespa stock index recently hit levels not seen since before the crisis as foreign investors poured money into Brazilian equities, betting the nation's economy is poised for a recovery.