Kenneth Rapoza- Forbes, 03/07/2016
Economic forecasts in Brazil are chipping away at the country’s GDP this year, and next year is starting to get cut down to size as well. According to the weekly Focus survey by Brazil’s Central Bank, 2016 will herald a depression-era contraction rate of 3.8% this year instead of the previous estimate of 3.5% made by dozens of Brazilian economists at the big banks. Next year is already starting to look less exciting. GDP growth for 2017, once forecast to growth at 0.6%, is now seen growing at 0.5%. The mood remains dour.
It’s palpable from New York to Buenos Aires.
“I think Brazil’s economy is in trouble at least until August,” says Jorge Compagnucci, an analyst with Promarlon in Buenos Aires and an independent investor. “When the Olympics are over, I would’t be surprised to hear about real estate developers folding and defaults rising on mortgage debt in Brazil. But I do think that after August, Brazil and the rest of emerging markets start looking better.”