BRASÍLIA: Brazil’s GDP fared worse than almost any other major economy in 2015, contracting by 3.8%, according to the national statistics agency IBGE. Economic growth in the world’s seventh-largest economy has fallen sharply in recent months. This was due partly to low commodity prices and sluggish global growth.
But political paralysis has hampered Brazil’s efforts to tackle its economic problems, including a budget deficit that has reached 10.8% of GDP. President Dilma Rousseff is trying to head off the opposition’s efforts to impeach her over alleged accounting irregularities, which means she cannot afford to alienate supporters in her Workers’ Party by cutting spending or raising taxes.
Investigations are also continuing into a high-level bribery and corruption scandal involving major construction projects. Ms Rousseff’s predecessor as president, fellow Workers’ Party politician Luiz Inacio Lula da Silva, is one of the people under investigation.
What a contrast with the optimism of the 2000s. That was when the term Brics was coined, covering the largest emerging economies, including Brazil, which were seen as major contributors to global economic growth.
Among the group today, India is still performing strongly, but China has slowed – and many economists say by much more than the official figures suggest. Russia’s economy contracted by a similar amount to that of Brazil last year, and South Africa – a later addition to this group – managed a very lacklustre 1.3% growth last year. Some factors, such as Brazil’s political crisis, may pass, but on the wider question for the emerging economies, the jury is still out.
