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Montevideo, November 19th 2018 - 11:23 UTC

Brazil recession deepens, but prospects for 2017 seem much brighter

Tuesday, May 3rd 2016 - 06:54 UTC
Full article 6 comments
The consensus is now suggesting Brazil’s economy will shrink by 3.89% this year, following last year’s 3.8% contraction, which was the worst in 25 years. The consensus is now suggesting Brazil’s economy will shrink by 3.89% this year, following last year’s 3.8% contraction, which was the worst in 25 years.
However economists surveyed raised their 2017 growth forecast (0.4%) for the second straight week, which could be betting on Rousseff's removal. However economists surveyed raised their 2017 growth forecast (0.4%) for the second straight week, which could be betting on Rousseff's removal.

Brazil’s recession is expected to deepen this year as economists brace for an even steeper contraction than in 2015. Economists have downgraded their 2016 outlook for Latin America’s largest economy for the 15th week in a row, according to the weekly Focus survey of about 100 economists by the Brazilian central bank.

 The consensus is now suggesting Brazil’s economy will shrink by 3.89% this year, following last year’s 3.8% contraction, which was the worst in 25 years.

If the prediction is correct, that would make 2015 and 2016 the first back-to-back years of contraction since the 1930s and the deepest combined recession since official records began in 1901.

Brazil’s economy came crashing back down to earth last year amid a collapse in global commodity prices, a widening budget deficit, stubbornly high inflation and the vast corruption scandal at state-controlled oil company Petrobras that has paralyzed a large swathe of the oil and construction industries.

The country’s ongoing political turmoil – President Dilma Rousseff is fighting to save herself from impeachment – has also not helped the economy.

But in a sign that the removal of Rousseff from office could be a plus for the country, economists surveyed raised their 2017 growth forecast for the second straight week. They are now expecting Brazil to grow 0.4% next year on hopes that whoever will take over from Rousseff will implement market-friendly policies to generate growth.

Categories: Politics, Brazil.

Top Comments

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  • :o))

    Sounds like a joke! The Prospects for 2'017 are to Add More Taxes!

    May 03rd, 2016 - 09:52 am 0
  • Lucifer

    They were saying the same thing last year, it will be better next year, alas they were wrong and they'll be wrong again.
    Politics is one of the things wrong with the country. Getting rid of Dilma may help a slight bit but not much.
    They need to get back to living within their means, get rid of regulation, get rid of the crazy work rules and remember they're a 3rd world country not a 1st.

    May 03rd, 2016 - 11:20 am 0
  • slouis

    Of course things will be better next year. Dilma will be gone, crime and corruption will cease to exist, infrastructure will miraculously improve, import duties will be lowered, Brazilian football will once again rise to the top, the Real will return to it's wildly over valued place, TAM will start treating passengers nicely again, Brazilians will welcome tourists, inflation will become deflation, picanha will be affordable, China will find it's mojo, commodity exports will soar, oil prices will soar on worldwide demand, and the government will shrink. Did I forget anything?

    May 03rd, 2016 - 04:34 pm 0
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