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Brazil' economic activity further contracts in April as confidence dwindles

Saturday, June 20th 2015 - 09:06 UTC
Full article 17 comments
A shrinking economy and inflation running at an 11-year high have raised popular discontent with President Dilma Rousseff A shrinking economy and inflation running at an 11-year high have raised popular discontent with President Dilma Rousseff

Economic activity in Brazil fell sharply in April from March, worse than already negative market estimates and showing still more evidence the once-booming economy is heading toward a recession.

 High inflation and dwindling confidence have dragged down consumption, until recently the main engine of growth in Latin America's largest economy.

“This is another data point confirming the weakness of growth in Brazil and supports our expectation for a 0.7% quarter versus quarter contraction in real GDP during the second quarter,” Barclays' economist Bruno Rovai said in a note to clients. Rovai said the drop in the index has totaled 2.2% so far this year.

A shrinking economy and inflation running at a more than 11-year high have raised popular discontent with President Dilma Rousseff, who has adopted more orthodox policies to regain the confidence of investors.

Most economists expect activity to continue to slide as the central bank is poised to further raise interest rates to battle inflation while the government cuts spending to put its fiscal accounts back in order.

The Brazilian economy is expected to contract 1.35% this year, according to a central bank poll of economists released on Monday, its deepest recession in 25 years.

Categories: Economy, Brazil.

Top Comments

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  • Skip

    Supposedly the west was the one declining.

    Jun 20th, 2015 - 09:47 am 0
  • Chicureo

    I read yesterday an article about the World Cup kickbacks and aftermath of football stadiums that are abandoned.
    The Worker's Party FOOKED their poverty stricken supporters. Typical Communist Socialist behavior...

    Jun 20th, 2015 - 10:56 am 0
  • yankeeboy

    Until they cut slumdweller's free money off they'll keep dragging the country down.
    Delicate balance
    and its not going to work.

    I think its hilarious anyone believed they “created” a new middle class with free money.
    Stupid Socialist never think the $ will run out.

    They get exactly what they deserve
    I hope they starve
    Just like the Marxist Monkeys in Venezuela.

    Jun 20th, 2015 - 12:16 pm 0
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