|
 The economy of Brazil suffered the worst decline in more than a decade in the last quarter of 2008, shrinking 3.6% from the previous quarter, official figures show. The fall ends a three year consistent growth, even when output for the whole of 2008 remained strong at 5.1%.
The weak numbers were released on the same day that the International Monetary Fund warned that the world economy was headed for a "Great Recession" bolstering the view that Brazil's central bank will need to aggressively cut interest rates to prevent a prolonged downturn.
On an annual basis, gross domestic product expanded just 1.3% in the fourth quarter from a year earlier which marks a sharp fall from the 6.8% in the third quarter, according to the IBGE statistics agency.
The quarterly contraction does not bode well for this year which begins on a much weaker footing, which means the country's economy this year could end up with zero growth.
"The fact the economy slowed so sharply in the fourth quarter sets the stage for an even steeper slowdown in 2009," said Roberto Padovani, chief economist at WestLB do Brasil.
Industrial output posted its worst-ever yearly plunge in January, sinking 17.2%, the IBGE reported on Friday. Consumer confidence hit an all-time low in February and some companies, in spite of government suggestions, are cutting thousands of jobs to cope with plummeting demand.
Capital spending plummeted 9.8% in the fourth quarter after surging 6.7% in the previous quarter, signaling that companies are wary of investing to increase capacity in the face of so much economic uncertainty. The agricultural sector, a pillar of the Brazilian economy contracted 0.5% in the fourth quarter from the third when it grew 1.5 percent.
Household consumption, which had been driving Brazil's economic boom in recent years, shrank 2% on a quarter-on-quarter basis. The services sector contracted 0.4% from the third quarter, when it expanded 1.4%.
On the positive side, the downturn has helped ease inflation with retailers slashing prices to attract customers.
Most analysts are now expecting Brazil's central bank to slash its benchmark lending rate by 150 basis points on Wednesday following on the release of the GDP contraction data.
For the whole of 2008, the economy grew 5.1% after expanding 5.7% in 2007. The manufacturing sector dragged the economy down in the fourth quarter, with industries like steel producers and automakers all scaling back production as demand dried up. Industrial output slumped 7.4% from the third quarter, its biggest drop since the fourth quarter of 1996.
Mercopress
 |
Subscribe to this comment's feed
The small, coastal town of Condé is located just a twenty minute's drive from João Pessoa, the capital of Paraíba. The Northeast of Brazil has historically been a place of encounter and mixing between peoples. For millenia groups of indigenous people fished, farmed, migrated and sometimes fought along this large, fertile area. 
The Brazilian diplo-MÁ-cia (bad diplomacy) carries on its accelerated course towards the non-acknowledgment of human rights, although sometimes it takes pleasure in saying that it does precisely the opposite. The visit of Iran's president, Mahmoud Ahmadinejad, is another example of a diplomatic omission that verges on hypocrisy. 
On July 4, 2006, representatives of Argentina, Brazil, Paraguay and Uruguay met in Caracas to sign the protocol for the entrance of Venezuela into the Southern Common Market (Mercosur). After two and a half years, the protocol was approved by the legislative bodies of Argentina and Uruguay, and as of now it may be only days away from being ratified by the continent's economic megalith, Brazil. 
Some sectors of the fight against AIDS have suggested that Thabo Mbeki, the former president of South Africa, committed genocide through his absence from the fight against the illness in his country throughout his two terms. 
One hundred and eleven years after Brazil abolished slavery, the number of workers deprived of their freedom is still huge. They raise cattle, produce charcoal, sugar cane or timber. Some of them, most undocumented Bolivians, work in basements of small apparel factories in São Paulo and other metropolis. 
On November 7, 2009 a few friends and I had an opportunity to take a look inside a Brazilian jail outside the city of Rio de Janeiro. We were able to take some amateur footage of our experience on video (see link below). It's no surprise, of course, that the typical Brazilian jail lacks some of the functionality of those in North America or Europe, but our experience that day was quite shocking. 
Depletion of the Amazon Rainforest is not a new concern facing environmentalists, biologists, ecologists, and a growing number of the Amazonian indigenous peoples. For decades they have feared for the fate of the world's most biologically diverse and species-rich hothouse. 
Geisy Arruda made history this week in Brazil, but for all the wrong reasons. What began as a poorly planned fashion statement has become a worldwide tale. Geisy decided to wear a pink mini-dress to her private college in São Paulo state, and after that, all hell broke loose. 
The push of vigilante groups in Rio de Janeiro's favelas (shantytowns) in the last three years is the most important and alarming information of the just-released study by the Rio de Janeiro University's Violence Research Center (Nupev-Uerj). 
A dispute over drug trafficking territory in Rio de Janeiro has intensified lately, leaving in its wake unprecedented acts of violence, such as the downing of a police helicopter in the northern zone of the city on October 17. Three policemen died and another two were injured. This event has drawn the attention of the international media, who are raising the issue of public security for the 2016 Olympics to be held in Rio.