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The coming depression blog | April 24, 2017

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Slow Economic Growth in Brazil

Slow Economic Growth in Brazil

 

Brazil is one of the key developing economies in the world. It has a large population and for the last decade or so looked to develop economically for its population. But 2015 is likely to be a difficult year for Brazil’s economy. The forecast for GDP Growth in Brazil for 2015 is not high and the world might be entering into tough economic times as many countries across the world are facing tough economic challenges. The following are some details regarding slow economic growth in Brazil:

Slow Economic Growth in Brazil
•    Brazil is one of the major economies of South America. The forecast for Brazil’s economic growth in 2014 is a mere 0.5 %. This means it will barely stay in the positive growth territory in 2015. It might be even worse than this expected forecast if proper measures are not taken to revive the economy.
•    If the expected growth figures are much lower in reality and they slip below the 0% levels then Brazil has a very real chance of going into recession in 2015.
•    Brazil’s government introduced tax hikes, interest rate hikes and budget cuts which all have a direct impact on the citizens of the country. This can prove to have a negative impact on the economy of Brazil.
•    Corruption in Brazil especially in its energy, engineering and infrastructural sector companies means that the infrastructural progress of the economy is in serious trouble.
•    Other major problems facing the country include a low rainfall, water scarcity in many areas and a huge energy bill for the country.
•    Government spending reduces with budget cuts which mean the government can only spend so much and the balance has to be met by investment into the economy which is also low at the moment.
•    A weak household consumption in Brazil is another worry for the economy. The Football World Cup 2014 just wrapped up less than a year ago in Brazil. A lot of money was spent during this world cup and some experts suggest that the World Cup stadiums are already turning into white elephants.
•    The country’s sovereign debt rating was cut early last year and investment into the country is not as high as what Brazil needs at the moment.
Brazil is still a developing country with millions of poor people. The infrastructure of the country is not that strong and if the country goes into recession in 2015 it will be a bad sign for the economy of Brazil and also for the region.

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