News / Americas

    Brazil Enters Recession in Pre-election Blow to Rousseff

    Presidential candidate and Brazilian President Dilma Rousseff of Workers' Party (PT) speaks during the first television debate at the Bandeirantes TV studio in Sao Paulo, Aug. 26, 2014.
    Presidential candidate and Brazilian President Dilma Rousseff of Workers' Party (PT) speaks during the first television debate at the Bandeirantes TV studio in Sao Paulo, Aug. 26, 2014.
    Reuters

    Brazil suffered a recession in the first half of the year as investment plunged and the country's hosting of the World Cup suffocated economic activity, a major blow to President Dilma Rousseff's already diminishing hopes for reelection in October.

    Latin America's largest economy has suffered stagnant growth for more than three years under Rousseff's left-leaning policies, which have dented consumer and business confidence and caused heavy losses for financial investors.

    People look at a list of job offers posted in a main street in downtown Sao Paulo, Aug. 13, 2014.People look at a list of job offers posted in a main street in downtown Sao Paulo, Aug. 13, 2014.
    x
    People look at a list of job offers posted in a main street in downtown Sao Paulo, Aug. 13, 2014.
    People look at a list of job offers posted in a main street in downtown Sao Paulo, Aug. 13, 2014.

    The economy took an even bigger downturn in the second quarter, contracting 0.6 percent from the first quarter, according to government statistics agency IBGE. The agency also revised down its estimate for first quarter activity to a 0.2 percent contraction, meaning the economy entered a recession.

    News of the recession, Brazil's first since the global financial crisis of 2008-09, will give a powerful weapon to Rousseff's opponents in the Oct. 5 election at precisely the moment that her candidacy is at its most vulnerable.

    Polls over the last week have shown Rousseff falling behind centrist candidate Marina Silva in the event of a second-round runoff, which appears likely. Silva and the other main candidate, Senator Aecio Neves, have hammered Rousseff for being weak on inflation and ruining the economic momentum that made Brazil a Wall Street darling last decade.

    Civil construction and manufacturing especially suffered during the second quarter, data showed. Brazil hosted the World Cup in June and July, which caused a slowdown at many factories and retailers as cities declared public holidays on game days to prevent logistical problems such as heavy traffic.

    Yet economists said Brazil's problems go beyond any short-term considerations such as the Cup. They blamed government policies that have relied too much on stimulating domestic demand while failing to attract investment.

    They said the data underscored that the next president - whoever it may be - would need to undertake deep reforms.

    “The recovery from here will be slight,” said Eduardo Velho, chief economist at INVX Global, an investment fund in Sao Paulo. “We need a new economic program based on fiscal tightening, monetary flexibility, and improvements in productivity.”

    Investment plummeted 5.3 percent in the second quarter compared to the previous quarter, its worst performance since early 2009. Industry also suffered its fourth straight quarterly decline, down 1.5 percent.

    Following the data, some economists said they would revise down their forecasts for full-year economic growth to zero.

    Rousseff has blamed the slowdown on continued economic weakness abroad, such as in Southern Europe.

    The second quarter contraction was worse than expectations of a 0.4 percent contraction, according to the median forecast of 47 analysts polled by Reuters.  

    You May Like

    Native Americans Ask: What About Our Water Supply?

    They say they have been facing a dangerous water contaminant for decades - uranium – but the problem has received far less attention than water contamination by lead in Flint, Michigan

    Pakistan's President Urges Nation Not to Celebrate Valentine's Day

    Mamnoon Hussain criticizes Valentine's Day, which falls on Sunday this year, as a Western import that threatens to undermine the Islamic values of Pakistan

    Mother of IS Supporter: Son Was Peaceful, 'Role Model'

    Somali-American Abdirizak Mohamed Warsame pleaded guilty Thursday to charges of conspiring to provide material support to Islamic State militants

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Not Again from: Canada
    August 29, 2014 2:56 PM
    Socialist policies, bordering on comunism, have never produced any good economic results. Rousseff's Brazil had very much aligned itself with the other downward spiralling socialist, like Venezuela, Cuba, Bolivia.... all of them very much in an economic failure mode; and courting the likes of Iran and Russia, makes investors really run away. Who would invest any money? in countries that do not respect private property, nor do they provide clear gurantees on investments and corporate security.
    Many of the Latin American countries' leaders are stuck in the era of Fidel and Che, whom they romanticize and somehow see as having provided for a path of economic self sustenance an a better future for their people, none of it occurred, it is a myth that grows amongst South American leftists.
    One of the worse sitiations observed, as of late, is Chile; once a country that was an economic beacon of development and meeting the needs of its people, now with Bachelet once again at the helm, she is leading the contry into the usual socialist downward spiral; Chile is rapidly sinking into the state it was during the Allende years 50+ years ago; soon it will be like Venezuela.
    Brazil will be better if it provides a good climate for investors, and people get back to work; given the massive numbers of young people in Brazil, if its economy is not set on a solid growth path of 8%+ growth, Brazil will become a destabilized broken country; already law and order/security are near collapse in many parts of the country, especially the big cities, and bandits once again roam the countryside and its highways.
    Maybe Silva will set a new course for Brazil, out of its troubling economic downturn, it will be very challenging, because the downward spiral has a significant amount of negative momentum; many policies and controls will need to be rescinded or changed, very tough days ahead can be predicted for Brazil.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    New Technology Aims to Bring Election Transparency to Ugandai
    X
    Serginho Roosblad
    February 12, 2016 9:29 PM
    A team of recent graduates from Uganda’s Makerere University has created a mobile application designed to help monitor elections and expose possible rigging. The developers say the app, called E-Poll, will make Uganda's democratic process fairer. From Kampala, VOA's Serginho Roosblad reports.
    Video

    Video New Technology Aims to Bring Election Transparency to Uganda

    A team of recent graduates from Uganda’s Makerere University has created a mobile application designed to help monitor elections and expose possible rigging. The developers say the app, called E-Poll, will make Uganda's democratic process fairer. From Kampala, VOA's Serginho Roosblad reports.
    Video

    Video Refugees in Kenya Vie to Compete in Rio Olympics

    In Kenya, refugees from other African nations are training at a special camp and competing for a limited number of slots in this year's Rio Olympics under the flag of the International Olympic Committee (IOC). As Lenny Ruvaga reports from Ngong, this is a first in Olympic history.
    Video

    Video Gateway to Mecca: Historical Old Jeddah

    Local leader Sami Nawar's family has been in the Old City of Jeddah for hundreds of years and takes us on a tour of this ancient route to Mecca, also believed to be the final resting place of Adam's wife, Eve.
    Video

    Video Two-thirds of World Faces Water Shortage

    Four billion people — or two out of every three on the planet — do not have enough water to meet their basic needs. That is far greater than previously thought, according to a new study that presents a more accurate picture of the problem. As VOA's Rosanne Skirble reports, the findings will help policymakers and the public craft solutions to address the threat.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video Russia Bristles at NATO Expansion in E. Europe

    Russian Foreign Minister Sergei Lavrov is meeting Friday with the head of NATO after the Western military alliance and the United States announced plans for the biggest military build-up in Europe since the Cold War. Russia has called NATO's moves a threat to stability in Europe. But NATO says the troop rotations and equipment are aimed at reassuring allies concerned about Russia as VOA's Daniel Schearf reports from Moscow.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.

    More Americas News

    Haitian Lawmakers Choose Jocelerme Privert as Interim President

    Privert said after the vote he hopes to lead a government that will 'foster confidence within all sectors of society'

    Mexico Accuses Prison Officials of Homicide after Brutal Riot

    Warden, two others detained following one of deadliest prison riots in Mexico's history last week; ‘Who is directly responsible? ... The director of the penitentiary,’ state prosecutor says

    Pope Tells Mexican Leaders to Provide 'True Justice'

    Pontiff warns nation's president, lawmakers against permitting privilege for an elite class at the expense of the rest of society

    More than 5,000 Pregnant Colombian Women Infected With Zika Virus

    Total number of people diagnosed in Colombia has reached 31,555, the National Health Institute says in its Epidemiology Bulletin, among them 5,013 pregnant women

    Pope-Patriarch Meeting Seen by Russians as Significant

    Meeting in Havana on Friday between Pope Francis and Patriarch Kirill was the first between the two church's leaders

    The Internet Comes to Cuba ... Slowly

    Smartphones prevalent, but only to make or receive calls, as mobile Internet access severely limited to certain areas; restriction has its charms, some say