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Montevideo, September 23rd 2018 - 16:22 UTC

No end to Brazil's bad news: two consecutive years of recession ahead

Wednesday, September 9th 2015 - 08:10 UTC
Full article 27 comments
GDP estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from 100 private financial institutions on the state of the economy. GDP estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from 100 private financial institutions on the state of the economy.
Analysts also turned more negative on the outlook for 2016: GDP to contract by 0.50%. Last week, they expected the economy to contract by 0.40% next year. Analysts also turned more negative on the outlook for 2016: GDP to contract by 0.50%. Last week, they expected the economy to contract by 0.40% next year.

Analysts expect Brazil's economy to contract by 2.44% this year, marking the worst performance since 1990, and inflation will hit 9.29%, the Central Bank said Tuesday. The latest figures represent a downward revision from last week, when analysts expected Latin America's largest economy to contract by 2.26% and inflation to come in at 9.28%.

 The GDP estimates come from the Boletin Focus, a weekly Central Bank survey of analysts from about 100 private financial institutions on the state of the national economy.

Analysts' pessimism rose following the government's release last month of a report showing that the GDP contracted 1.9% in the second quarter on top of a decline of 0.70% in the first quarter, meeting the technical definition of a recession.

Economists define a recession as six consecutive months of negative GDP. Analysts were forecasting a contraction of 1.97% until four weeks ago, but the numbers have been revised downward for two months. The government, for its part, expects the economy to contract by 1.49% this year.

Brazil's economy is headed for its worst economic performance since 1990, when it contracted by 4.35%.

Analysts also turned more negative on the outlook for 2016, when they expect the GDP to contract by 0.50%. Last week, they expected Brazil's economy to contract by 0.40% next year.

If the forecasts prove accurate, it will be the first time that Brazil experiences two consecutive years of recession since records started being kept in 1948.

Top Comments

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  • Skip

    I do believe that a Brazilian recently said that it was my country that was going to turn into a zombie.

    But Brazil isn't even sleep walking into this recession it is on zombie auto pilot.

    This recession isn't just because China is slowing down. It's structural because Brazil failed to reform during the boom times and instead started to act as if the boom would last forever and the problems could be ignored as unimportant.

    Even now, where is the REFORM?

    Where are the major institutional and structural changes to the way the country works?

    Cut the size of the government.
    Reduce the politicians.
    Reform taxation.
    Privatise.

    Do something.

    Instead Dilma sits there picking lint out of her belly button. The country is fixated on what to do with her and she is focussed on just keeping her job. If she was a true patriot AND leader she would clear the decks.

    Resign and call an election.

    Brazil needs leadership and she can't provide it.

    Sep 09th, 2015 - 10:18 am 0
  • ElaineB

    I think the Brazilian politicians saw it as the boom times for their private bank accounts.

    Sep 09th, 2015 - 11:24 am 0
  • Brasileiro

    Soon the BRICS countries did not accept the dollar as currency in trade and investment transactions.

    The West has its days numbered. R.I.P.

    Sep 09th, 2015 - 11:45 am 0
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