Bad news for the region: Brazil’s economy fell 4.5% in 2016

Lo afirma un informe del Banco Central. En dos años, en el país vecino hubo una contracción del 8,1%.


Until now, a deep crisis in Brazil was known. But according to new data, the fall in economic activity in the 2015-2016 biennium is the worst in its history. A report by the Central Bank, which calculates the index, reported that the collapse in 2016 was 4.5%. And it added to a decline of 4.28% in 2015. This shows a contraction of no less than 8.1 percent in two years. Such records are not found outside countries that go through wars.

In the Brazilian case, some factors that occurred simultaneously led to the catastrophe: an unfavorable international situation, with falling prices of raw materials; But especially a political gale that began on the starboard of 2014 and has not yet concluded. The impeachment of former President Dilma Rousseff and the coming to power of her former deputy, current head of state Michel Temer, failed to change the course of economic agents’ expectations, as they tried to convince the public from the Palace of the Planalto . It is true that the dollar fell (from 4 reais in May to 3.07 yesterday). But that did not recreate a wave of investment nor did it encourage the consumption of families and the government.

Day by day, the Minister of Finance, Henrique Meirelles, tries to inspire encouragement to his compatriots of entrepreneurship. He affirms, repeatedly, that “the worst is over” and that growth will now come. For now, the figures insist on denying it.

The index of economic activity of the Central Bank is considered almost equivalent to the GDP calculated by the Brazilian Institute of Geography and Statistics (IBGE), but it is not identical. It does anticipate a trend for the result to be presented by that institution in early March. For 2017, the projections of the Focus bulletin, which reflects the opinions of the operators of the different markets, the forecast is slightly better: there would be a growth of 0.48% of GDP. For some it is encouraging that inflation has decreased. They say that this could indicate a reduction of the level of interest rates, whose stature places them in the second place in the world ranking. Everything will depend, however, on unpredictable political events. With a popularity that barely touches 10%, Temer lives one of the most delicate moments since he began to exercise power on August 31. Worse still, the results of recent polls reveal that if the presidential elections were today, it would barely get 4%.

On the other hand, the leader is former president Lula da Silva, followed by former minister Marina Silva. The other opponents are far from winning the votes that these two leaders sum up. Still, that’s not a problem for Temer. There are other things that obsess him immediately and that can make him lose the job. One of the most critical is the denunciations of the 77 executives of the Odebrecht group that took advantage of the system of awards awarded to save the company, and themselves. For now, the results of these confessions are secret. But the day they reveal themselves, perhaps after Carnival, will provoke a storm of consequences. There are several cabinet ministers of Temer who were mentioned as potential recipients of the fines paid by that holding company. Among them is Wellington Moreira Franco, whom the president appointed a few days ago as minister of the General Secretariat of the government, in order to protect him from the onslaught of the Lava Jet. That alone fact already caused commotion. And pushed to a new call to protest against those who want to bury the process that is carried out by Judge Sergio Moro.

In Temer’s unpopularity index, the daily lives of Brazilian families are noticeably affected. In 2016, people’s consumption dropped by no less than 6.2% and is said to have also been the worst historical record. The same occurred with the service sector, which contracted 5%. And the industry continued with high losses: in 2016 registered a decrease of 6.6%. Reports from Brazil indicated that by the end of the year, 2.5 million Brazilians will again become very poor, having lived the ascent for more than 10 years

Original text “El Clarin”