The latest numbers coming out of Brazil confirm what Goldman Sachs said last December: “What started as a recession … is now mutating into an outright economic depression, given the deep contraction of domestic demand.”
Translation: President Dilma Rousseff’s attempt to stimulate the slowing economy via massive insertions of new debt has in fact had the opposite result.
Consumers have cut back by more than eight percent across the board, while investment spending has declined more than 10 percent last year, with cumulative capital spending down by 21 percent in the last two-and-a-half years. And there appears to be no end in sight. In Rio de Janeiro alone, 1,200 small businesses have already closed thanks to rising costs and slowing sales.
Unemployment is now at 16.5 percent and the real, Brazil’s currency, has lost a quarter of its value against the dollar just in the last 12 months .... http://investmentwatchblog.com
