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

Wednesday, September 9th 2015 - 08:10 UTC
Full article 27 comments

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%. Read full article

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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 - Link - Report abuse 0
  • ElaineB

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

    Sep 09th, 2015 - 11:24 am - Link - Report abuse 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 - Link - Report abuse 0
  • ElaineB

    @3 Oh, really? Brazil is the future and always will be. Never the present.

    Sep 09th, 2015 - 12:06 pm - Link - Report abuse 0
  • Brasileiro

    The Brazil have influence over half the world's countries or even more. And we will work to the exclusion of the dollar is universal. We may have a future, but you only have the past.

    http://www.exportnews.com.br/2015/09/balanca-comercial-superavit-de-us-554-milhoes-na-1a-semana-de-setembro/

    4 days = half billion

    Dollar is toilet paper, nothing more.

    Sep 09th, 2015 - 12:33 pm - Link - Report abuse 0
  • ChrisR

    TOLD YOU!

    It was always going to be beyond the few months that were claimed.

    It will probably run to 10 years before everything is back financially to the period where car manufacturers were putting up new plants and I bet Mercedes are pig sick at what has happened to their plans.

    A few months ago the MB importer for UYU was offering reasonably specced C Class automatics for U$D60k which when you realise how expensive cars are here (a VW Jetta DSG is U$D37,600) that was a bargain brought out of desperation I suspect.

    Sep 09th, 2015 - 12:39 pm - Link - Report abuse 0
  • ElaineB

    @5 You misunderstand the comment I made. The future is never here.

    If you believe your nonsense statement then good luck to you.

    Sep 09th, 2015 - 12:49 pm - Link - Report abuse 0
  • Skip

    Oh no!

    The BRICS might not use the US dollar?

    Considering 3 out of the 5 BRICS posted negative growth last quarter I'd say they have bigger worries.

    Poor Brasileiro thinks the “west” is just the US. So limited.

    Sep 09th, 2015 - 12:59 pm - Link - Report abuse 0
  • Conqueror

    @5. Can you understand that the world's major countries have abilities far beyond yours. China is failing big time. Russia is “trying” to use military capability to justify its criminal actions.

    Brazil can be defecated on without any problem. In reality, there are only two “major powers”. The UK and the US. The UK has ability. The US has equipment. China has massive “wild” offensives. Easily ended. Tactical nukes. Russia is slightly better. But, demonstrably, Russian equipment is third-rate. So is Brazil.

    Sep 09th, 2015 - 03:34 pm - Link - Report abuse 0
  • Tik Tok

    Brasshole - Brazil is going to the dogs and your socialist brain still manages to fire shots against the supposed “west”. Mind numbingly stupid. The great majority of Brazilians desire there country in many ways to be like countries of the “west”, yet you want to follow Venezuela? Maybe you should move to the Amazon and live with a tribe there in a subsistence economy. Don't think it would be long before they realise you're useless and cook you up and eat you.

    Sep 09th, 2015 - 05:21 pm - Link - Report abuse 0
  • Jack Bauer

    @5 brASSHOLE (Cuzão)
    Ridiculous radical rant from a runt.
    Brazzo, you are a schizo......when are you going to realize that your dreams will never come true ?

    @10 Tik-Tok
    Trying to explain anything to the runt is quite useless...it is all beyond his comprehension. Instead of him polluting the Amazon, would be better off for everyone if he got a one-way ticket to VZ, where there are no Dollars, and far less toilet paper. He'd probably sniff and lick his bum like a dog.

    Sep 09th, 2015 - 09:52 pm - Link - Report abuse 0
  • Brasileiro

    Jack Bauer, give your ass to another. I do not like “viado” like you.

    Sep 09th, 2015 - 10:39 pm - Link - Report abuse 0
  • Tik Tok

    Brasshole, look what PT has achieved, credit downgrade just announced, watch investors pull out of Brazil and the currency to dive. Go lick some arse in Venezuela with Maduro and Lula

    Sep 10th, 2015 - 12:04 am - Link - Report abuse 0
  • Brasileiro

    I also found excellent news this downgrade. Speculation only generates inflation.
    With respect to sovereign debt, Brazil should withdraw its reserves totaling 550 billion dollars (Treasuries, ADR's and IMF) to redeem the bonds issued in US dollars (200 billion) and the rest to buy gold and depositing it in the Central Bank as collateral.

    Sep 10th, 2015 - 12:16 am - Link - Report abuse 0
  • Skip

    Collateral against what?

    Autarky?

    Sep 10th, 2015 - 12:45 am - Link - Report abuse 0
  • Brasileiro

    I do not know how to say in English “lastro monetário”.

    Sep 10th, 2015 - 12:48 am - Link - Report abuse 0
  • Skip

    Brasileiro

    I know you aren't here to learn. Which is your right. If you think Brazil already has all the answers and does everything right, then why does it have these problems?

    Why is it in recession?
    Why is the government broke and running a huge deficit?
    Why is government debt growing?
    Why is Brazil uncovering its biggest corruption scandal ever?
    Why are unemployment and bankruptcies growing?

    A rating downgrade is a reflection of what BRAZILIANS are doing to BRAZIL. It isn't punishment or being petty like you.

    Your economy is in crisis and all you do is gloat about how you will make crises elsewhere.

    You might find this downgrade “excellent news” but that is be aside you are too limited to realise the effects. Investment will flow OUT of Brazil now. I'm sure in your autarkic wet dreams this sounds perfect. Until you realise that this will cause your currency to drop even further. It means your government won't be able to fund infrastructure projects or its deficit as easily. Which means higher borrowing costs. Which means a bigger deficit.

    This will deepen your recession. But according to you, recessions don't affect anyone in Brazil. Everyone is happy and laughing and just waiting for the west to collapse.

    Your recession has JUST started. It is going to get a lot worse.

    However I expect you to remain blithely ignorant of that for the next couple of years as Brazil's economy drops out of the top 10 largest. Russia is just about to. Seems that whole BRICS world domination plan isn't going according to plan.

    Sep 10th, 2015 - 02:20 am - Link - Report abuse 0
  • ElaineB

    Brazil downgraded to JUNK status. How is that good for Brazil?

    Worst recession for 25 years.
    Real has dropped by 20% against the dollar.
    Inflation at 30%.
    Rampant corruption.
    Infighting in the government on how to implement austerity. (Yes, austerity)
    World recession on commodities.

    None of this is good news for Brazil, sadly.

    Why are the Brasiliero Gang pinning their hopes on a phrase 'BRIC' coined in 2001 by an economist working for Goldman Sachs? It was a paper predicting EMERGING markets. It was produced to advise about long term investment and suggested that Brazil, Russia, India and China could EMERGE to greater status in 2050. A lot has changed since then.

    The only country of the original four still worth long term investment at reasonable risk is India. The rest are in the shit. It may change, of course, and a lot depends on confidence and INVESTMENT from outside the countries.

    The Brasiliero Gang fail to understand that in order to EMERGE they need investment. When you have been downgraded to JUNK status it is very hard to attract the investment you need.

    This JUNK status means money will be leaving Brazil (as pointed out by Skip) and the money your country will have to borrow becomes more expensive.

    The idea that Brazil, or even South America, can operate independent from the rest of the world and without trading is a complete nonsense.

    Sep 10th, 2015 - 05:40 am - Link - Report abuse 0
  • Brasileiro

    I will limit myself to one question at a time:
    “Why is it in recession”?

    Until recently our growth was based on domestic consumption. But like any economic model that has lasted a long time ends up generating mismatch as inflation for example. So it was and still is necessary to change the model slowly and safely. And we're doing it.

    In the last five years we have developed a powerful oil industry. Our agribusiness doubled in size. Our investments in energy, including renewable, almost tripled in size, our purchases of capital goods multiplied by four in the last five years.

    So it was necessary to generate energy security, skilled labor and provide water resources to leverage investment in production.

    However, in the middle of the course of these past five years the government has made strategic vision errors such as tax relieve many business segments such as anti-cyclical action in order to secure jobs. But the global crisis still lingers and we no longer practice as anti-cyclical actions, and we are trying to reverse that still exist.
    continues...

    Sep 10th, 2015 - 09:46 am - Link - Report abuse 0
  • Skip

    Who the hell are you?

    Sep 10th, 2015 - 09:59 am - Link - Report abuse 0
  • ElaineB

    @20 Brasileiro is a Brazilian Gang that meets to hate on the West. Everyone need a hobby.

    Sep 10th, 2015 - 10:01 am - Link - Report abuse 0
  • Skip

    Yes but have they recruited someone new? Or is that cut and pasted from somewhere?

    Be due this one doesn't toe the line regarding the BRICS fallacy. “..our growth was based on domestic consumption.” Is just code for easy credit. See back to my question on why bankruptcies are increasing-this is why.

    Sep 10th, 2015 - 10:21 am - Link - Report abuse 0
  • Brasileiro

    following...

    With the re-election of Dilma Rousseff without a majority parliamentary base or disaggregated difficulties overcoming the economic mistakes made by the government the difficulties in approving laws to reverse the anti-cyclical practices have become almost impossible to be approved by sheer temper tantrum of opposition right. So we ran the agility to reverse the fiscal and political problems that caused the recession. However, in the medium term and with the return of investment in the oil industry we see a promising future for Brazil.

    Sep 10th, 2015 - 10:29 am - Link - Report abuse 0
  • Skip

    LMAO

    So Dilma can't rule!

    And as usual, Brazil is the country of the future.

    Seems the recent boom left no legacy. Thank God Australia has plenty to show from our boom.

    Sep 10th, 2015 - 11:13 am - Link - Report abuse 0
  • Brasileiro

    No legacy? Do not make me laugh. Brazilian society today is much richer, educated and politicized than 13 years ago.
    The wealth that Brazil produces today in the space of a year is five times the wealth produced in 2002.

    Walk the streets today and see the photos of 15 years ago. You will be amazed.

    Sep 10th, 2015 - 11:25 am - Link - Report abuse 0
  • Tik Tok

    Everyone knew once they started fiddling with the budget surplus figures they were going to lose their rating. Sad day for Brazil, been a full circle, PT have managed to destroy everything positive that FHC brought economically to the country (which did so much good for the poor) and now in the name of the poor PT are screwing them really really hard. If violence was already bad, expect it to get worse! A lot of very disgruntled “middle classers ” out there with lots of prestacoes to pay.

    Sep 10th, 2015 - 04:23 pm - Link - Report abuse 0
  • Jack Bauer

    @12 brASSHOLE
    Não entendi....não quer mais chupar pica ? o que quer então ? levar no rabo ? é, deve ser isso, já o Lula está comendo o seu há 12 anos.

    @14 asshole
    “I also found excellent news this downgrade.”......
    To you, everything, as long as done by or caused by Dilma and Lullashole, is “excellent news”. You understand even less about Economy than Dilma and Mantega.

    @19 asshole
    “I will limit myself to one question at a time: “Why is it in recession”?
    Well, you've finally realized you cannot cope with more than one question at a time...and even then don't know the answer ; Allow me :
    ”Until recently our growth was based on domestic consumption.“.......
    Correct, but growth based on credit, causing enormous indebtedness when things turned sour. Instead of using the 'good times' to build a solid base, the government just spent it's way into bankruptcy. And you are too stupid to realize it.

    ”In the last five years we have developed a powerful oil industry.“......
    Sure, that's why PB is virtually bankrupt. But it will survive, even if the government has to stick its hand in your pocket - once again - to cover the loss.

    ”So it was necessary to generate energy security, skilled labor and provide water resources to leverage investment in production.“.....
    Hilarious. So one must break PB in order to achieve ”energy security“...great logic. Water resources ? today at the mercy of much needed heavy rainfall, because of the lack of significant investment over the last two decades. As to investment, you can say 'goodbye' to foreign capital, as well as to local.

    ”However, in the middle of the course of these past five years the government has made strategic vision errors “
    Well, at last you admit the obvious. The incompetence of Dilma, Lulla and the PT, allied with widespread corruption, has finally taken its toll. I hope this situation bites you in the ass, asshole.

    Wealth ? so you think the ”bolsa família' is wealth ?

    Sep 10th, 2015 - 04:35 pm - Link - Report abuse 0

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