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Brazil’s Economy Shrinks 3.8%
Brazil’s gross domestic product contracted 3.8% in 2015, the biggest reported decline to date among the world’s major economies, says the government’s IBGE statistics bureau.
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Brazil’s gross domestic product contracted 3.8% in 2015, the biggest reported decline to date among the world’s major economies, says the government’s IBGE statistics bureau.
Analysts blame the slump on sagging commodity prices, a slowing global economy, high inflation and Brazil’s inability to handle its own financial woes.
The country’s central bank agreed on Wednesday to hold its benchmark interest rate at 14.25% in an effort to control Brazil’s 11% inflation rate. The government’s target is 4.5%.
Brazil's policy makers have resisted pressure to relax its monetary policy to revive economic growth. A central bank survey finds analysts predicting the country’s inflation rate will fall 3 points this year and 1.5 points in 2017.
Economists say the country faces a period of austerity that will only get worse if the government continues to dither over its problems.
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