Brazil economy disappoints

Comment on this story


BrazilFlag

http://www.sxc.hu/

Brazil's economy expanded just 0.2 percent in the first quarter compared with the final quarter of last year, setting the stage for another disappointing year and casting new doubt on the health of emerging markets.

The low growth, which was less than half what markets expected, marked a third straight quarter of weak activity in the world's sixth-largest economy. It will also increase pressure on President Dilma Rousseff to enact much bolder reforms that could reclaim Brazil's mantle as a favourite of global investors.

That reputation has faded since mid-2011 as Brazil failed to cope adequately with the challenges posed by its boom over the past decade. An overloaded transport system, an expensive and underqualified labor force and chronically low levels of investment have combined to hold back the economy.

The data released by the government on Friday showed that, despite numerous stimulus packages enacted by Rousseff since late last year, investment shrank in the first quarter. Some business leaders say that much more dramatic steps - such as an across-the-board simplification of Brazil's byzantine tax code - are necessary to get the economy back on track.

“The government needs a growth plan. It's not enough to carry out isolated measures because they don't take us anywhere,” said Miguel Daoud, director for Global Financial Advisor, a consulting firm.

The worst-performing sector in the first quarter was agriculture, which has been damaged by a severe drought in southern Brazil. While industry did better than some expected, separate and more up-to-date data released on Friday suggested a meaningful recovery in that sector also remains far off.

Taken together, the data seem likely to spark more interest rate cuts by Brazil's central bank and cause another wave of downward revisions to the economic outlook. Economists had already expected growth of just under 3 percent this year - in line with growth of 2.7 percent in 2011, and a far cry from the booming 7.5 percent expansion in 2010.

“These are signs that, really, GDP (this year) may end up below what people are expecting, what the government's expecting,” said Rodrigo Melo, chief economist at Maua Sekular, an asset management firm in Sao Paulo.

Several other big emerging markets are also sputtering, threatening to deprive the global economy of one of its only sources of fast growth. India reported its slowest quarterly pace of growth in nine years on Thursday, while South Africa may also struggle to reach 3 percent growth this year.

Payroll data released in the United States on Friday also added to pessimism about the global economy.

The darker economic outlook at home and abroad caused Brazil's real to weaken about 0.6 percent against the dollar by midday. Brazil's stock market fell more than 2.5 percent before recovering to trade down about 1 percent.

Interest rate futures also fell sharply as investors bet the central bank would continue an easing cycle that has already caused the benchmark Selic rate to fall 4 percentage points since last August, including a 50 basis-point cut announced on Wednesday.

BRAZIL'S WOES HOMEGROWN

Brazil's problems are to some extent a reflection of problems abroad, including a slowdown in China, its biggest trading partner, and a loss of confidence in the euro zone. Rousseff has blamed a monetary “tsunami” of cheap money in Europe and the United States for making Brazil's currency over-valued and causing its exports to become uncompetitive.

Yet other Latin American countries have generally held up better, with the International Monetary Fund forecasting the region as a whole will grow 3.7 percent this year. That suggests that more local factors - such as a lack of investor confidence - are playing a big role in Brazil's woes.

Finance Minister Guido Mantega told Reuters on Monday that the economy should accelerate in the second half of this year as interest rate cuts and measures to stimulate credit and relieve high industry inventories take effect.

Private economists also expect some improvement. But a deeper look at Friday's data shows several problems, particularly the chill in investment, that could limit Brazil's prospects going forward.

Spending on capital goods declined 1.8 percent compared with the previous quarter, the IBGE statistics agency said. Investment overall fell to 18.7 percent of GDP compared with 19.5 percent in the first quarter in 2011.

“The plunge in investment is the issue that appears of most concern to us, underscoring that, not only the destocking cycle is hurting the economy, but also that confidence is deteriorating,” Mauricio Rosal, an analyst for Raymond James, wrote in a research note.

The farm sector contracted 7.3 percent compared with the previous quarter after dry weather over the past season dragged down output from Brazil's two most important crops - soybeans and sugar cane.

Industrial output expanded 1.7 percent from the last quarter of 2011, IBGE said. Yet the HSBC Purchasing Managers' Index for Brazil, a survey released separately on Friday, showed that manufacturing activity contracted for a second straight month in May as output and new orders fell.

Household consumption, the driving force of Brazil's economic boom over the last decade, expanded 1 percent in the first quarter from the previous quarter.

Gross domestic product had been expected to expand 0.5 percent on a quarter-on-quarter basis, according to the median forecast of 29 analysts polled by Reuters.

Latin America's largest economy grew 0.8 percent in the first quarter compared with the year-earlier period, IBGE said. That was below expectations of growth of 1.3 percent, according to the median forecast of 25 analysts in the poll. - Reuters


sign up
 
 

Comment Guidelines



  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

     

Join us on

IOL-Social networks IOL-Social networks IOL-Social networks IOL-Social networks
CreativeSmile
I'm a 37 year old woman looking to meet men between the ages of 36 and 42.
View Profile
ThisIsTheRemix
I'm a 33 year old woman looking to meet men between the ages of 31 and 41.
View Profile
Sosialemeis2
I'm a 28 year old woman looking to meet men between the ages of 35 and 46.
View Profile
Lisa_Jayne
I'm a 27 year old woman looking to meet men between the ages of 23 and 35.
View Profile
sportliefhebber
I'm a 25 year old woman looking to meet men between the ages of 25 and 31.
View Profile
Abs
I'm a 36 year old woman looking to meet men between the ages of 36 and 40.
View Profile
This_is_m3
I'm a 45 year old woman looking to meet men between the ages of 45 and 50.
View Profile
Cymbidium
I'm a 47 year old woman looking to meet men between the ages of 47 and 60.
View Profile
KayBee75
I'm a 39 year old woman looking to meet men between the ages of 35 and 49.
View Profile
TenderMoments
I'm a 48 year old woman looking to meet men between the ages of 45 and 55.
View Profile
Gem31
I'm a 24 year old woman looking to meet men between the ages of 25 and 35.
View Profile
Lemoenbloeisel
I'm a 35 year old woman looking to meet men between the ages of 30 and 45.
View Profile
butterflykisses14
I'm a 30 year old woman looking to meet men between the ages of 31 and 51.
View Profile
LilaBlom
I'm a 23 year old woman looking to meet men between the ages of 23 and 33.
View Profile
Bluebell531
I'm a 46 year old woman looking to meet men between the ages of 40 and 60.
View Profile
Mysong
I'm a 48 year old woman looking to meet men between the ages of 50 and 55.
View Profile
sunshinebright
I'm a 55 year old woman looking to meet men between the ages of 45 and 60.
View Profile
Sunshine_again
I'm a 46 year old woman looking to meet men between the ages of 43 and 58.
View Profile
blondgirl
I'm a 57 year old woman looking to meet men between the ages of 53 and 60.
View Profile
ioio
I'm a 37 year old woman looking to meet men between the ages of 35 and 45.
View Profile
AmaJ
I'm a 44 year old woman looking to meet men between the ages of 42 and 50.
View Profile
Stella143
I'm a 35 year old woman looking to meet men between the ages of 34 and 45.
View Profile
love_passionately
I'm a 43 year old woman looking to meet men between the ages of 45 and 55.
View Profile
Lulu_101
I'm a 36 year old woman looking to meet men between the ages of 38 and 45.
View Profile
_Alwayssmiling
I'm a 30 year old woman looking to meet men between the ages of 30 and 41.
View Profile
AH1974
I'm a 40 year old woman looking to meet men between the ages of 40 and 48.
View Profile
Duifie038
I'm a 45 year old woman looking to meet men between the ages of 36 and 50.
View Profile
MrsRobinson
I'm a 37 year old woman looking to meet men between the ages of 36 and 45.
View Profile
pesin15
I'm a 38 year old woman looking to meet men between the ages of 18 and 100.
View Profile
MustLoveDogz
I'm a 33 year old woman looking to meet men between the ages of 33 and 43.
View Profile
Livs_89
I'm a 25 year old woman looking to meet men between the ages of 30 and 38.
View Profile
twinkle87
I'm a 27 year old woman looking to meet men between the ages of 28 and 45.
View Profile
Kosmos075
I'm a 39 year old woman looking to meet men between the ages of 35 and 55.
View Profile
Athena
I'm a 37 year old woman looking to meet men between the ages of 37 and 45.
View Profile
limegreen48
I'm a 48 year old woman looking to meet men between the ages of 45 and 55.
View Profile
soutenpepper
I'm a 25 year old woman looking to meet men between the ages of 25 and 37.
View Profile
Dreamer1987
I'm a 27 year old woman looking to meet men between the ages of 25 and 35.
View Profile
naty677
I'm a 28 year old woman looking to meet men between the ages of 39 and 62.
View Profile
snowbird7
I'm a 33 year old woman looking to meet men between the ages of 31 and 39.
View Profile
Magnolia52
I'm a 52 year old woman looking to meet men between the ages of 50 and 65.
View Profile
Katryn777
I'm a 34 year old woman looking to meet men between the ages of 34 and 40.
View Profile
Veronica2477
I'm a 38 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Starlight_001
I'm a 35 year old woman looking to meet men between the ages of 35 and 45.
View Profile
GirlInterruptedNow
I'm a 41 year old woman looking to meet men between the ages of 38 and 45.
View Profile
BMull08
I'm a 19 year old woman looking to meet men between the ages of 19 and 30.
View Profile
Chanex
I'm a 20 year old woman looking to meet men between the ages of 23 and 26.
View Profile
bluemon
I'm a 30 year old woman looking to meet men between the ages of 30 and 45.
View Profile
NY25
I'm a 25 year old woman looking to meet men between the ages of 25 and 30.
View Profile
nads42
I'm a 42 year old woman looking to meet men between the ages of 38 and 58.
View Profile
bon1bon
I'm a 35 year old woman looking to meet men between the ages of 29 and 40.
View Profile
angelface93
I'm a 21 year old woman looking to meet men between the ages of 21 and 29.
View Profile
FairyLady
I'm a 51 year old woman looking to meet men between the ages of 47 and 70.
View Profile
AMy_303
I'm a 39 year old woman looking to meet men between the ages of 35 and 45.
View Profile
kel3
I'm a 31 year old woman looking to meet men between the ages of 31 and 38.
View Profile
voelkos
I'm a 54 year old woman looking to meet men between the ages of 45 and 56.
View Profile
1020
I'm a 34 year old woman looking to meet men between the ages of 34 and 38.
View Profile
MistressofBrand
I'm a 34 year old woman looking to meet men between the ages of 34 and 44.
View Profile
itu22
I'm a 22 year old woman looking to meet men between the ages of 25 and 37.
View Profile
PhoenixLin
I'm a 32 year old woman looking to meet men between the ages of 25 and 42.
View Profile
Pretty_Nerd
I'm a 28 year old woman looking to meet men between the ages of 28 and 38.
View Profile
Jimmyhgirl
I'm a 37 year old woman looking to meet men between the ages of 37 and 55.
View Profile
honkytonkwoman
I'm a 58 year old woman looking to meet men between the ages of 55 and 64.
View Profile
CLC_91
I'm a 23 year old woman looking to meet men between the ages of 25 and 35.
View Profile
Belind4_M
I'm a 19 year old woman looking to meet men between the ages of 19 and 30.
View Profile
Stiletto1
I'm a 53 year old woman looking to meet men between the ages of 50 and 57.
View Profile
supe24
I'm a 34 year old woman looking to meet men between the ages of 35 and 65.
View Profile
Ninks
I'm a 36 year old woman looking to meet men between the ages of 36 and 42.
View Profile
RiaStar
I'm a 35 year old woman looking to meet men between the ages of 32 and 40.
View Profile
Gypsey4Life
I'm a 51 year old woman looking to meet men between the ages of 50 and 62.
View Profile
OneWay
I'm a 39 year old woman looking to meet men between the ages of 35 and 47.
View Profile
Vinnette
I'm a 52 year old woman looking to meet men between the ages of 45 and 55.
View Profile
KarooBoereMeisie
I'm a 34 year old woman looking to meet men between the ages of 30 and 40.
View Profile
CC82
I'm a 32 year old woman looking to meet men between the ages of 30 and 45.
View Profile
dreamsoftly
I'm a 49 year old woman looking to meet men between the ages of 47 and 58.
View Profile
Comet43
I'm a 43 year old woman looking to meet men between the ages of 40 and 54.
View Profile
Rarefind
I'm a 54 year old woman looking to meet men between the ages of 52 and 63.
View Profile
findmemyman
I'm a 48 year old woman looking to meet men between the ages of 35 and 50.
View Profile
iamclassy
I'm a 43 year old woman looking to meet men between the ages of 50 and 65.
View Profile
thrillsandfrills
I'm a 40 year old woman looking to meet men between the ages of 41 and 45.
View Profile
AGX
I'm a 36 year old woman looking to meet men between the ages of 35 and 44.
View Profile
veldmuis007
I'm a 33 year old woman looking to meet men between the ages of 28 and 35.
View Profile
molletdelvalles
I'm a 39 year old woman looking to meet men between the ages of 35 and 55.
View Profile
JustAnna
I'm a 39 year old woman looking to meet men between the ages of 25 and 55.
View Profile
MademoiselleMyGirl
I'm a 30 year old woman looking to meet men between the ages of 30 and 40.
View Profile
PearlyGem
I'm a 55 year old woman looking to meet men between the ages of 50 and 60.
View Profile
Wonderer_0202
I'm a 42 year old woman looking to meet men between the ages of 40 and 52.
View Profile
Roxyxxx
I'm a 43 year old woman looking to meet men between the ages of 43 and 50.
View Profile
Foreverinhope
I'm a 48 year old woman looking to meet men between the ages of 45 and 56.
View Profile
devotedlady
I'm a 43 year old woman looking to meet men between the ages of 43 and 55.
View Profile
DaffodilTulip
I'm a 48 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Sugababe
I'm a 41 year old woman looking to meet men between the ages of 32 and 42.
View Profile
2gether4ever
I'm a 41 year old woman looking to meet men between the ages of 40 and 50.
View Profile
Lvit2C
I'm a 29 year old woman looking to meet men between the ages of 27 and 39.
View Profile
lookingsexy200
I'm a 36 year old woman looking to meet men between the ages of 34 and 45.
View Profile
Dee35_vtd
I'm a 36 year old woman looking to meet men between the ages of 30 and 45.
View Profile
Cat007
I'm a 46 year old woman looking to meet men between the ages of 45 and 55.
View Profile
Gem24
I'm a 24 year old woman looking to meet men between the ages of 25 and 40.
View Profile
xine_414
I'm a 28 year old woman looking to meet men between the ages of 25 and 35.
View Profile
LuckyCharm_440
I'm a 29 year old woman looking to meet men between the ages of 29 and 40.
View Profile
kristella
I'm a 30 year old woman looking to meet men between the ages of 30 and 40.
View Profile
matiekat
I'm a 66 year old man looking to meet women between the ages of 18 and 100.
View Profile
Lifechanger_7
I'm a 25 year old man looking to meet women between the ages of 18 and 30.
View Profile
bellagio
I'm a 69 year old man looking to meet women between the ages of 55 and 65.
View Profile
saks001
I'm a 61 year old man looking to meet women between the ages of 49 and 60.
View Profile
Boereman
I'm a 52 year old man looking to meet women between the ages of 40 and 52.
View Profile
happymaker66
I'm a 48 year old man looking to meet women between the ages of 25 and 45.
View Profile
B_B_B
I'm a 43 year old man looking to meet women between the ages of 18 and 45.
View Profile
tigercat
I'm a 54 year old man looking to meet women between the ages of 22 and 54.
View Profile
FeaturedProfile
I'm a 54 year old man looking to meet women between the ages of 40 and 54.
View Profile
Marley77
I'm a 37 year old man looking to meet women between the ages of 28 and 35.
View Profile
Rebelinbluejeans
I'm a 62 year old man looking to meet women between the ages of 40 and 62.
View Profile
LEO1982
I'm a 32 year old man looking to meet women between the ages of 24 and 40.
View Profile
Moonrakker
I'm a 64 year old man looking to meet women between the ages of 50 and 64.
View Profile
MLACOME0147
I'm a 55 year old man looking to meet women between the ages of 49 and 79.
View Profile
Woody777
I'm a 50 year old man looking to meet women between the ages of 35 and 55.
View Profile
Cruisingoldie
I'm a 46 year old man looking to meet women between the ages of 30 and 50.
View Profile
Brad88
I'm a 52 year old man looking to meet women between the ages of 45 and 60.
View Profile
Eugene053
I'm a 54 year old man looking to meet women between the ages of 25 and 45.
View Profile
Carden
I'm a 32 year old man looking to meet women between the ages of 24 and 30.
View Profile
oth1982
I'm a 32 year old man looking to meet women between the ages of 18 and 100.
View Profile
cloudhopper
I'm a 56 year old man looking to meet women between the ages of 45 and 55.
View Profile
Fairtalk101
I'm a 46 year old man looking to meet women between the ages of 25 and 37.
View Profile
TheRealPeterPan
I'm a 35 year old man looking to meet women between the ages of 28 and 35.
View Profile
Geard1977
I'm a 37 year old man looking to meet women between the ages of 26 and 40.
View Profile
longingforu
I'm a 35 year old man looking to meet women between the ages of 18 and 38.
View Profile
DeeeXx
I'm a 31 year old man looking to meet women between the ages of 21 and 32.
View Profile
Mais_171
I'm a 49 year old man looking to meet women between the ages of 40 and 55.
View Profile
thearchitect1
I'm a 46 year old man looking to meet women between the ages of 36 and 70.
View Profile
JustJve99
I'm a 47 year old man looking to meet women between the ages of 40 and 45.
View Profile
shadowwarrior
I'm a 59 year old man looking to meet women between the ages of 38 and 55.
View Profile
rossi46
I'm a 66 year old man looking to meet women between the ages of 55 and 65.
View Profile
GideonVisser
I'm a 30 year old man looking to meet women between the ages of 24 and 29.
View Profile
LiveLifeAlways
I'm a 43 year old man looking to meet women between the ages of 33 and 41.
View Profile
anandr
I'm a 57 year old man looking to meet women between the ages of 38 and 65.
View Profile
Double_N
I'm a 41 year old man looking to meet men between the ages of 25 and 50.
View Profile
ch_nb
I'm a 28 year old man looking to meet women between the ages of 18 and 45.
View Profile
Parmos1
I'm a 64 year old man looking to meet women between the ages of 55 and 63.
View Profile
Bushbaby210
I'm a 27 year old man looking to meet women between the ages of 21 and 35.
View Profile
QuietDreamer
I'm a 34 year old man looking to meet women between the ages of 25 and 29.
View Profile
M0J0
I'm a 34 year old man looking to meet women between the ages of 23 and 35.
View Profile
gentlebutcrazy
I'm a 58 year old man looking to meet women between the ages of 35 and 55.
View Profile
srchinluv
I'm a 52 year old man looking to meet women between the ages of 46 and 65.
View Profile
JustCallMeBwana
I'm a 47 year old man looking to meet women between the ages of 28 and 38.
View Profile
WagOngeduldig
I'm a 41 year old man looking to meet women between the ages of 30 and 45.
View Profile
LoveFriendFirst123
I'm a 56 year old man looking to meet women between the ages of 50 and 72.
View Profile
Rich_H
I'm a 48 year old man looking to meet women between the ages of 25 and 48.
View Profile
DoctorSpin
I'm a 41 year old man looking to meet women between the ages of 30 and 45.
View Profile
ekke_706
I'm a 50 year old man looking to meet women between the ages of 40 and 55.
View Profile
thesaltofthesea
I'm a 45 year old man looking to meet women between the ages of 25 and 50.
View Profile
Gerrie1
I'm a 67 year old man looking to meet women between the ages of 50 and 60.
View Profile
boersoekvrou14
I'm a 39 year old man looking to meet women between the ages of 30 and 42.
View Profile
Breukes
I'm a 35 year old man looking to meet women between the ages of 26 and 35.
View Profile
contour
I'm a 43 year old man looking to meet women between the ages of 34 and 39.
View Profile
plodof
I'm a 58 year old man looking to meet women between the ages of 35 and 55.
View Profile
Espavo
I'm a 50 year old man looking to meet women between the ages of 30 and 48.
View Profile
Determined_69
I'm a 45 year old man looking to meet women between the ages of 35 and 47.
View Profile
Padriac_1974
I'm a 40 year old man looking to meet women between the ages of 30 and 45.
View Profile
Jurgy62
I'm a 52 year old man looking to meet women between the ages of 37 and 55.
View Profile
TheRisingSun
I'm a 41 year old man looking to meet women between the ages of 25 and 40.
View Profile
arew
I'm a 49 year old man looking to meet women between the ages of 30 and 55.
View Profile
Pete_1
I'm a 70 year old man looking to meet women between the ages of 55 and 65.
View Profile
Liefasb
I'm a 63 year old man looking to meet women between the ages of 50 and 60.
View Profile
chester3
I'm a 54 year old man looking to meet women between the ages of 49 and 76.
View Profile
Kawa1000
I'm a 49 year old man looking to meet women between the ages of 40 and 50.
View Profile
Ben_57
I'm a 57 year old man looking to meet women between the ages of 42 and 55.
View Profile
Virion
I'm a 30 year old man looking to meet women between the ages of 25 and 33.
View Profile
heartroll
I'm a 54 year old man looking to meet women between the ages of 49 and 60.
View Profile
skyandsand
I'm a 31 year old man looking to meet women between the ages of 25 and 35.
View Profile
softtail
I'm a 50 year old man looking to meet women between the ages of 35 and 48.
View Profile
Abeachboy
I'm a 51 year old man looking to meet women between the ages of 38 and 48.
View Profile
RVCZ
I'm a 24 year old man looking to meet women between the ages of 18 and 24.
View Profile
WanderingShadow
I'm a 39 year old man looking to meet women between the ages of 20 and 40.
View Profile
cornrlius205
I'm a 46 year old man looking to meet women between the ages of 30 and 50.
View Profile
Gster1
I'm a 64 year old man looking to meet women between the ages of 45 and 60.
View Profile
IceDad66
I'm a 48 year old man looking to meet women between the ages of 35 and 45.
View Profile
PerfectGentleman_700
I'm a 36 year old man looking to meet women between the ages of 25 and 39.
View Profile
Free_Spirited
I'm a 45 year old man looking to meet women between the ages of 34 and 44.
View Profile
Stressfree
I'm a 58 year old man looking to meet women between the ages of 42 and 52.
View Profile
Dreamzzz
I'm a 48 year old man looking to meet women between the ages of 40 and 45.
View Profile
CapeLover
I'm a 49 year old man looking to meet women between the ages of 41 and 50.
View Profile
Thebestone1
I'm a 57 year old man looking to meet women between the ages of 35 and 48.
View Profile
letslook
I'm a 46 year old man looking to meet women between the ages of 25 and 45.
View Profile
OohCharles
I'm a 53 year old man looking to meet women between the ages of 25 and 45.
View Profile
Teddiebeerpa
I'm a 54 year old man looking to meet women between the ages of 40 and 50.
View Profile
Rumrun
I'm a 56 year old man looking to meet women between the ages of 44 and 56.
View Profile
Newdreamz
I'm a 49 year old man looking to meet women between the ages of 37 and 46.
View Profile
BobTheExtremeBuilder
I'm a 47 year old man looking to meet women between the ages of 25 and 47.
View Profile
GenuineJ
I'm a 64 year old man looking to meet women between the ages of 48 and 64.
View Profile
MysticKitesurfer
I'm a 43 year old man looking to meet women between the ages of 27 and 36.
View Profile
Summerstorm_007
I'm a 60 year old man looking to meet women between the ages of 48 and 58.
View Profile
Duk_880
I'm a 39 year old man looking to meet men between the ages of 20 and 50.
View Profile
Pottie16
I'm a 44 year old man looking to meet women between the ages of 35 and 45.
View Profile
koolstoof55
I'm a 59 year old man looking to meet women between the ages of 45 and 63.
View Profile
philip_unplugged514
I'm a 62 year old man looking to meet women between the ages of 50 and 65.
View Profile
PaulA79
I'm a 35 year old man looking to meet women between the ages of 25 and 40.
View Profile
waitingforgodot
I'm a 68 year old man looking to meet women between the ages of 53 and 60.
View Profile
Kent123
I'm a 54 year old man looking to meet women between the ages of 45 and 60.
View Profile
audiess
I'm a 50 year old man looking to meet women between the ages of 39 and 64.
View Profile

Business Directory