Good morning! Is the Brazilian economy going into recession again? The House votes on a decree to cut red tape by altering labor regulations. Argentina’s own Joesley Day. FBI looks for a suspected Al-Qaeda member in Brazil. Operation Car Wash to last for one more year—at least. Enjoy your read.
Is the Brazilian economy going into recession again?
The Central Bank’s Economic Activity Index (IBC-Br), which is a leading indicator of what the official GDP numbers will be, suggested that Brazil’s economy shrank 0.13 percent over the last quarter. If confirmed by the GDP figures (to be released at the end of the month), it will mean Brazil has fallen into a technical recession, where negative growth is seen for two consecutive quarters.
Why it matters. The negative numbers are not that surprising, as different sectors showed poor performance in recent months. But going into another recession just two years after regaining growth could be a huge blow to the Brazilian economy, further eroding confidence from consumers and business owners—which could reduce consumption and investments, creating a vicious recessive cycle. Economy Minister Paulo Guedes asked for patience. On his side is the fact that analysts expect GDP figures to be...