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Montevideo, November 15th 2018 - 08:24 UTC

Brazil in recession; Minister Mantega blames external factors and World Cup

Saturday, August 30th 2014 - 10:53 UTC
Full article 22 comments
The worst possible news for Dilma and her re-election chances in October The worst possible news for Dilma and her re-election chances in October
“This result was below expectations; we should not be talking of recession ... salaries are on the up and the consumer market is expanding” said Mantega. “This result was below expectations; we should not be talking of recession ... salaries are on the up and the consumer market is expanding” said Mantega.

Brazil has fallen into recession, further weakening President Dilma Rousseff, just weeks before voting in what will be a tough re-election battle. Brazil's national statistics institute said Friday GDP shrank 0.6% 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. A former environment minister under Rousseff's predecessor Lula da Silva, Marina shot to prominence after Socialist candidate Eduardo Campos died a plane crash on August 13.

She had been Campos' running mate and took the reins of his campaign.

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.

Analysts have in part blamed the poor second quarter showing on the public holidays which the government granted during the month-long World Cup football extravaganza.

Citizens enjoyed an afternoon off on Brazilian match days and host cities also enjoyed a holiday every time they hosted a game, dampening economic activity.

With most eyes on the football for five weeks, industrial activity dipped 1.5% in April-June, the IGBE national statistics agency figures show.

As Brazil ponders a potential poll win for Silva, second quarter investment fell 5.3%.

The Rousseff administration has cut growth forecasts for the year to 1.8%, blaming the global crisis. Market forecasts for 2014 are for GDP to rise just 0.7%, for a fourth straight year of sluggish growth after shooting ahead 7.5% in 2010.

Categories: Economy, Politics, Brazil.

Top Comments

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  • ChrisR

    Well, I told you this would happen when you fucked Mr. Market.

    Now Mr. Market is about to fuck you and well deserved it is.

    Dumb Ass Dilma should have canned The Liar Mantega when she had the chance; she didn't, so she will get chucked out with the rest of the thieving politicos'.

    Mr. Market ALWAYS gets his revenge on all those who mistreat him. These people are dumb.

    Aug 30th, 2014 - 11:36 am 0
  • ilsen

    I thought we were told previously by Dilma & Co. that the World Cup would be the salve for everything that ails Brazil? That it would usher in a new Age of Prosperity and prove finally, once and for all, that Brazil is a First World nation that deserves a seat at the top-table?
    If, going by the latest leftie 'logic' that the World Cup is part of the cause of recession, then what the hell is the Olympics going to do to them?

    Will they have an afternoon off everytime a Brazilian throws a shot-put or a javelin? How many 'heats' and semi-finals etc are there for each discipline in total that might feature a Brazilian?

    Will they learn from this?
    Is in Dilma in for the High-Jump?
    Will the economy make it over the Hurdles?

    One thing for sure, you can expect the Chinese to be taking home some Gold from Brasil in the near future....

    Aug 30th, 2014 - 11:42 am 0
  • Anglotino

    “...what once was a fast-growing regional powerhouse.”

    Another boom squandered.

    With Brazil's population about to peak in the next two decades, the chance to reach developed country status may have been missed for this century.

    Aug 30th, 2014 - 11:57 am 0
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