A pedestrian walks past a store in Sao Paulo, Brazil, on Sept. 1, 2020. (Xinhua/Rahel Patrasso)

Brazil's economy entered a technical recession after contracting 9.7 percent in the second quarter of the year compared to the first, the state-run Brazilian Institute of Geography and Statistics (IBGE) said on Tuesday.

It was the biggest drop on record for a single quarter, the agency said, blaming the impact of the novel coronavirus (COVID-19) pandemic.

Gross domestic product (GDP) dropped even more compared to the second quarter of last year, falling 11.4 percent and setting another record.

"Both rates marked the steepest drops since records began to be kept in 1996," said the report from IBGE.

In the first half of the year, Brazil's GDP contracted 5.9 percent compared to the same period last year.

The poor second quarter results meant the largest economy in Latin America is in a technical recession following two consecutive quarters of negative growth. The economy shrank 2.5 percent in the first quarter compared to the previous three months.

The government has forecast a 4.7 percent drop in economic growth in 2020, and a 3.2 percent expansion in 2021.