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Brazil economy faces steepest contraction since 1981

  • Brazilian Real. EconoTimes

Today's data confirmed that Brazil is facing its worst economic crisis in at least three decades, however this time around it's not just economic but the country is facing political uncertainty as well. A corruption scandal in state owned Petrobras, has hit current President Dilma Rousseff hard, who is facing impeachment.

  • According today's data, Brazil's economy contracted by -1.4% in final quarter of the year and was down -5.9% from a year ago. Economy contracted -1.7% in third quarter. Brazil economy shrank -3.8% in 2015, worst since -4.4% seen back in 1981.
  • Other economic measures aren't doing well either. Unemployment rate is at 7.6%, close to top level seen during 2008/09 crisis. To fight inflation, which is hovering at 10.71%, central bank has kept interest rate at record high of 14.25%.
  • Three top credit rating agencies have stripped Brazil of its investment grade status.
  • In 2015, Brazilian Real has dropped more than 30%, while deficit has edged up more than 10%.
  • Finance minister Joaquim Levy has resigned, which hasn't been much of good news for Real.

Due to weakness in Dollar, Real has managed to gain to 3.843 per Dollar today, but still down more than 30% in last 12 months.

  • Market Data
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