Brazil economy down 3.8 pct in 2015, worst since 1990

Brazil economy down 3.8 pct in 2015, worst since 1990

BRASILIA - Reuters
Brazil economy down 3.8 pct in 2015, worst since 1990

AFP photo

Brazil’s economy contracted sharply in 2015 as businesses slashed investment plans and laid off more than 1.5 million workers, official data showed on March 3, setting the stage for what could be the country’s longest and deepest recession in its recorded history.

Brazil’s gross domestic product (GDP) shrank 3.8 percent in 2015, capped by another steep contraction in the fourth quarter, according to statistics agency IBGE.

The 2015 slump was the steepest annual drop for Brazil’s GDP since 1990, when the country was grappling with hyperinflation and the effects of a debt default.

Brazil was hit in late 2015 by the disastrous burst of a major mining dam and the biggest oil strike in 20 years. Both struck an economy weakened by a paralyzing political crisis, rising inflation and interest rates, and a sharp drop in the price of its commodity exports.

The outcome was the lowest economic growth rate of all G-20 countries and one of the highest inflation rates, at 10.7 percent.

The recession is expected to continue in 2016 with another economic contraction of more than 3 percent, according to market forecasts, in what would be the longest and deepest downturn for Brazil since records began in 1901.

The 2015 downturn matched market expectations in a Reuters poll. Yields on interest rate futures rose after the data was published, also reflecting a split central bank decision to leave interest rates unchanged on March 2.