Brazil GDP: nothing to celebrate

Brazil has reasons to worry about its economy. Last week, the Brazilian national statistics office reported the second-quarter gross domestic product (GDP), which expanded 0.5% compared to the previous year. The result shows the country had the worst second-quarter GDP growth between BRICS (acronym for Brazil, Russia, India, China and South Africa). 

While Brazil’s gross domestic product expanded 0.5 percent, China grew 7.6% at the same time. India, in its turn, expanded 5.5%, Russia’ GDP increased 4.0% and South Africa, 3.2%. This was the fourth quarter in a row that Brazil’s growth is lower than the other major emerging markets.  

Even the United States, which the economic crisis is still echoing, expanded more than Brazil. The American GDP grew 2.3% in the second quarter from the previous year.

It means that Brazil has a hard work to do to put its economy on growth track again. The good news, however, is that comparing to the previous three months, Brazil grew 0.4%, the fastest pace in a year. According to economists, this is a little evidence of recovery, but the recent measures to spur consumption might not be enough to ensure Brazil’s economy growth this year will exceed the United States one.

Brazilian central bank survey says GDP will grow just 1.64% in 2012. So, the forecast for the Latin America’s biggest economy this year is lower than the 2.15 percent expected in the U.S. and 2.5 percent in Japan. And given all Brazil’s infrastructure bottlenecks and structural problems, the government’s biggest headache might be soon not its growth but the fight against inflation.


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