Brazil’s Stagflation

Brazil EconomyIt’s just the latest soft economic data point to come out of the country, which has been dealing with rising unemployment, inflation, and a weakening currency as its economy shrinks. The serious threat of stagflation is imminent.
“We’re running out of words to describe just how bad conditions are in Brazil’s industrial sector,” Capital Economics said in a note to clients. “The fall in production in April means that industry has now contracted in five of the past six months and that output has returned to the same level it was at the start of 2007.”

The Brazilian economy is in urgent need of sustained growth.
Unemployment – 6.2% and rising .
Growth – quarterly increase is around 0.3%
Investment and consumption is falling
Inflation at an 11 year high of 8.17%.

Source: The Economist

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