Friday, March 4th 2016 - 07:17 UTC

Brazilian GDP contracted 3.8% in 2015, the worst among major economies

Brazil's GDP fared worse than almost any other major economy in 2015, contracting by 3.8%, according to the national statistics agency IBGE. Economic growth in the world's seventh-largest economy has fallen sharply in recent months, which was due partly to low commodity prices and sluggish global growth.

Brazil's economic performance last year vies with that of Russia as the worst in a major economy for 2015.

On Wednesday, policymakers at the country's central bank voted to keep the benchmark Selic interest rate at its current level of 14.25%.

We want 2016 to be a year of recovery for jobs, employment, income, with economic growth, said Labor Minister Miguel Rosseto said.

 But political paralysis has hampered Brazil's efforts to tackle its economic problems, including a budget deficit that has reached 10.8% of GDP.

President Dilma Rousseff is trying to head off the opposition's efforts to impeach her over alleged accounting irregularities, which means she cannot afford to alienate supporters in her Workers' Party by cutting spending or raising taxes.

Investigations are also continuing into a high-level bribery and corruption scandal involving major construction projects. Ms Rousseff's predecessor as president, fellow Workers' Party politician Lula da Silva, is one of the people under investigation.

Brazil's economic performance last year vies with that of Russia as the worst in a major economy for 2015. Official figures for Russia's GDP last year have not yet been released. For Brazil it was the worst set of figures since 1990.

Analysts say Brazil is now caught in a classic case of stagflation - a combination of high inflation and a recession.

On Wednesday, policymakers at the country's central bank voted to keep the benchmark Selic interest rate at its current level of 14.25%.

High interest rates have traditionally been used in Brazil as a policy tool to keep inflation in check. But inflation has surged in any case, now standing at 11%, while high rates are hurting businesses.

“While we don't think Brazil is on the cusp of a fiscal crisis, the position is fragile,” said emerging markets economist Edward Glossop at Capital Economics.

“If nothing else, it is facing an extended period of budget austerity - and the longer the government fudges or delays the necessary adjustment, the more painful it will be.”

Brazil's government said the poor data had been expected and added that it was focused on boosting the economy this year. “We want 2016 to be a year of recovery for jobs, employment, income, with economic growth,” Labor Minister Miguel Rossetto said.

In a statement, the ministry said the 3.8% contraction of the economy in 2015 reported earlier was due to a drop in global commodity prices, a drought and a necessary adjustment of the economy to try to rebalance public accounts.

However, a private survey on Thursday showed services activity in February fell at the steepest pace on record, suggesting the economy had yet to hit bottom.

“We will probably see a similar contraction this year. There are no growth engines yet. The only one could be exports. But Brazil's economy is relatively closed, so we don't see that taking us out of this hole,” said Joao Pedro Ribeiro, Latin America economist with Nomura Securities.

20 comments Feed

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1 Skip (#) Mar 04th, 2016 - 09:42 am Report abuse
How's the end of that commodity boom going, Brazil?

Having a country full of natural wealth is useless if you have idiots running the show.
2 Brasileiro (#) Mar 04th, 2016 - 10:19 am Report abuse
The fools are the US and English companies that we or expel or nationalize. Including all NGO's.

Doing business with 5 Eyes causes glaucoma and blindness.
3 ChrisR (#) Mar 04th, 2016 - 10:33 am Report abuse
And at 2 we have the problem!

The PT are stuffed with idiots like Brasso except they are illegally wealthy and he is broke.

Well done the Brazil Nuts.

The IMF cometh!
4 SebaSvtz (#) Mar 04th, 2016 - 12:28 pm Report abuse
The sad joke of the socialist populism is finally going down and showing its true face: failure, corruption, poverty.

All these South-American lefty `heros´ were as money-hunger as the `capitalist´ they vow to hate and fight.

I hope it is the end of them. I hope we see them behind bars soon.
5 Jack Bauer (#) Mar 04th, 2016 - 03:47 pm Report abuse
“Brazil's government said the poor data had been expected and added that it was focused on boosting the economy this year. “We want 2016 to be a year of recovery for jobs, employment, income, with economic growth,” Labor Minister Miguel Rossetto said”.

Miguel Rossetto is another filthy incompetent comunist in Dilma's service. He knows damned well, as does the fat cow, that 2016 will be a year during which the situation of the economy will deteriorate even further. But that doesn't stop them from lying. There isn't the slightest chance of things improving, just need to look at the numbers .

@2 BRasshole
Just fyg, because it is obvious that you have a distorted idea of your own importance : ' you' will not expel any companies, 'you' will not nationalize anything - for the simple reason your darling Dilma cannot afford to - but you will just keep on spewing your crap, which will get you nowhere.
As to the NGO's you must be referring to, most are owned by petistas with the sole purpose of deviating money for the PT.... ..so yes, they should be investigated and closed down.

BRasshole, how did you like to see the LulaRat being dragged off for questioning ? I'm sure he shat his pants....
6 Tik Tok (#) Mar 04th, 2016 - 04:55 pm Report abuse
Soon gonna be all over for you Brasshole and your stink PT party.
The people of Brazil are very happy today....
7 Brasileiro (#) Mar 04th, 2016 - 07:48 pm Report abuse
It is necessary to isolate all the interests of the United States in Brazil. Expelling their companies. Their NGO's.

The embassy of the United States and them consulates are massive spy dens that need to be cut off from Brazil.

United States is an enemy country that needs to be treated as an enemy.
8 Briton (#) Mar 04th, 2016 - 08:19 pm Report abuse
No wonder Brazil is sinking, if everyone is its enemy.

try making a few friends.
9 Brasileiro (#) Mar 04th, 2016 - 08:22 pm Report abuse
We have our America, Africa, Asia.

We already have the BRICS

There is no shortage of friends!

www.youtube.com/watch?v=C_ccpgXfPoU&index=34&list=FLmXPTu1f8AdGlizWNiASx2A
10 L0B0MAU (#) Mar 04th, 2016 - 10:26 pm Report abuse
Many Brazilians and Brazilian Industries are already leaving the country; in spite of a high rate of exchange.

Considering: www.youtube.com/watch?v=R_Zj3GLyC_M
they took a wise decision!
11 Brasileiro (#) Mar 04th, 2016 - 10:37 pm Report abuse
Tu és um idiota se pensas que vencerás!

www.youtube.com/watch?v=cEq1E5c3eGo&list=FLmXPTu1f8AdGlizWNiASx2A&index=4
12 Don Alberto (#) Mar 05th, 2016 - 12:06 am Report abuse
Poor, poor Brasidiot.leiro

BRICS will soon be RICS, not 5 eyes, but only 4 eyes
13 Briton (#) Mar 05th, 2016 - 11:04 am Report abuse
Perhaps Brazil will rule all of south America in the next 25 years, then the world in the next 25 years.
14 Brasileiro (#) Mar 05th, 2016 - 11:24 am Report abuse
Who wants to take over America and the world are you, Saxons.

We are here to challenge and kill any Saxon who enter our world!

www.youtube.com/watch?v=MxlrZlp5a3c
15 L0B0MAU (#) Mar 05th, 2016 - 02:09 pm Report abuse
Pl. re-read my comment REF:12 L0B0MAU (#) on: en.mercopress.com/2016/03/03/brazilian-company-admits-in-plea-bargain-illegal-payments-to-rousseff-presidential-campaign
16 Jack Bauer (#) Mar 05th, 2016 - 04:34 pm Report abuse
The Lula Rat, after leaving the Federal Police yesterday, went to the local headquarters of the stinking PT , and during his speech to all the PT cock-suckers he once again showed his true colours : a crazy dog, mas with rabies, who cannot bear being antagonized....he needs to be put down.
17 L0B0MAU (#) Mar 05th, 2016 - 04:45 pm Report abuse
As far as the politics & economy are concerned; Brazil is almost on par with Venezuela & Ukraine. Together; they now can start some scheme = BRICKS [BRICS] - even if it's for the namesake [= BRICS].
18 Briton (#) Mar 05th, 2016 - 07:33 pm Report abuse
who enter our world
can you produce these documents showing us that you own this world.
19 Captain Poppy (#) Mar 05th, 2016 - 09:02 pm Report abuse
I can't even respond to stupidity at the level brasshole lives. Even single cell organisms have more thought then he possesses. Why isn't he shot and put out of his misery.
20 L0B0MAU (#) Mar 07th, 2016 - 01:03 pm Report abuse
FUNDO DO POÇO: i0.wp.com/www.humorpolitico.com.br/wp-content/uploads/2016/03/Fim-do-poco-Pibinho.jpeg?resize=580%2C393

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