According to Armada Corporate Intelligence the year has not gotten off to a very good start in Brazil and it has become progressively worse with each passing month. Many analysts have now concluded that President Dilma Rousseff is no longer capable of rescuing her government and will soon be seeing her own party working to get her to resign.
The economy is under assault from all directions – not all of them self-inflicted wounds. The consumer is utterly moribund – clobbered by the fact that too many people acquired more credit than they could cope with back in the boom days. Now there is very little spending taking place as the debt crush is still there and now there are issues of unemployment to compound the problem. Notwithstanding all the optimistic ‘BRIC’ predictions, Brazil today looks like the same ‘old Brazil’ high rates of joblessness at the same time there is rampant inflation. This is the kind of stagflation that leaves no good policy options.
The latest blow to Brazil comes from the China situation as China had become the most important destination for Brazil’s exports of iron ore, soy products and energy. All three of these markets have collapsed and Brazil is seriously short of foreign earnings. This comes on top of the drought and all the other inhibitions the country has been contending with.
Courtesy Dr. Chris Kuehl, Armada Corporate Intelligence
