Brazil’s economy tanks as multibillion-dollar corruption scandal expands

Dom Phillips – The Washington Post, 9/16/2015

Rodrigo Muchinelli, owner of a computer sales and repair store in Rio, said his business was in the red for the first three months of this year and is still limping. “It is a fight, daily,” said the 38-year-old businessman.

Laercio Soares closed a lucrative deal with a Rio samba school for his embroidery company in December. He used the money to close a family business whose workforce had fallen from 60 to eight. “We saw the perspective was bad,” said Soares, 65. “That’s why we took this drastic decision.”

He was proved right. Brazil’s economy is tanking — and it’s not just China, its principal trade partner, that is to blame. South America’s biggest economy fell into recession in August and is expected to shrink by 2 to 3 percent this year. Inflation is pushing 10 percent, its highest since 2003, unemployment has climbed to over 8 percent, and the Brazilian real has lost about a third of its value against the dollar this year.

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