Official figures from the Brazilian Institute of Geography and Statistics, the IBGE, said the economy had shrunk by 1.9 percent between April and June, after contracting a revised 0.7 percent in the first quarter of the year – itself significantly worse than the result previously announced of -0.2 percent.
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A quick economic recovery is not expected, with unemployment now at 7.5 per cent and rising and the national currency, the real, down about 25 per cent this year against the US dollar.
Brazil’s biggest engineering groups have had executives jailed and contracts frozen in the scandal, which threatens to freeze major public works and investments in the energy sector. The austerity program has torn apart her governing coalition, but failed to lift business and consumer confidence from record lows.
This is the most significant economic downturn for the South American nation since the global recession of 2008 and 2009.
“The only ray of light is that net exports made a positive contribution to growth for the second quarter in a row…Otherwise, this is a shocking report”, the economist added.
What’s less clear is when the bleeding will stop. But the impact of its slowdown isn’t likely to match the economic turmoil those countries are already facing, Trinkunas said. Even so, he could remain in office until and if he’s found guilty, a ruling that could take many years.
But instead of tightening the spigots on the money supply, Brazilian authorities combated the price pressures by subsidizing most of the goods and services under its control-from electricity bills to fuel prices to bus fares.
“Dilma is strolling on the excessive wire and not using a internet”, stated Eliane Cantanhede, considered one of Brazil’s best-known political commentators for the Estado de S. Paulo newspaper and Globo tv. Inflation remains high. GDP will continue shrinking in 2016, economists forecast.
The Brazilian government says gross domestic product contracted for the second consecutive quarter, sending the economy of Latin America’s biggest country into a technical recession.
All of that comes after Brazil’s economy posted annual growth of 4%, on average, between 2003 and 2013.
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“Pretty much everything is turning down”, chief emerging market economist at Capital Economics Neil Shearing told CNN. “We’re getting to the stage where Brazil will have growth of a very modest, low rate in the long term”. Moreover, the highest federal audit courtroom is wanting into whether or not she illegally used cash from state banks to fill price range holes in 2014, and Brazil’s prime electoral courtroom is investigating if any of the Petrobras kickback cash was used to fund her re-election marketing campaign final yr, through which she gained a slender victory. Her approval ratings have fallen to just 8 per cent.
