Roberto J. Samuelson – The Washington Post, 04/10/2016
Woe is Brazil. As August’s Summer Olympics approach, Latin America’s largest country — with a population of 206 million and an economy that is 40 percent of the region’s total — is caught in a harsh slump and faces a political crisis that could result in its president being impeached. How did this happen? What does it mean?
A decade ago, Brazil was a poster child for “emerging market” countries whose surging economies would ultimately make them wealthy nations. Remember BRIC: The acronym stood for “Brazil, Russia, India, China,” which were the anointed leaders. From 2004 to 2008, Brazil’s economy averaged growth of almost 5 percent a year, reports the Organization for Economic Cooperation and Development.
Economist Rafael Amiel of IHS, a consulting company, reports that the country’s economy has been shrinking since 2014 and that he expects cumulative decline of gross domestic product — total output — to be 8.5 percent. That’s roughly twice the GDP drop (4.2 percent) the United States suffered in the Great Recession. Brazil’s national unemployment rate has risen from 6.7 percent in mid-2014 to 9.5 percent at the end of 2015. It will probably go higher.