The recession which has enveloped Brazil for the last two years is reported to be the worst on record.
The latest figures show that the economy shrunk by 3.6% in 2016, leaving the country’s economy smaller by 8% than it had been in 2014. This is the sharpest retraction since records began.
Brazil has been a leading golden child of developing nations, lending its B initial to the term BRICs – Brazil, Russia, India and China – which investors hailed for having the best growth potential in the world.
Brazil boasted quantities of oil, metals and soy to meet global demand. But when the Chinese economy began to slow down, the demand for commodities also faltered and prices fell.
Domestic political crises and the exposure of sweeping corruption also made investors wary. The scandals concerned some of Brazil’s largest companies. Even the country’s president was not immune, and Dilma Rousseff was ousted from office. Her accusers included a number of high-ranking politicians who were themselves under investigation for corruption.
The unemployment rate rocketed to 12.6%, leaving nearly 13 million without paid jobs.
Some observers are hopeful that a corner now is being turned and that the economy may be able to pick up now that the prices of commodities are going up.
Other factors, such as falling interest rates and greater stability of domestic costs, could result in increased purchases. This would help power economic recovery.
