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When can Brazil escape deep recession?

Wednesday, March 08, 2017 - 01:32

Brazil's worst-ever recession intensified unexpectedly in the final quarter of 2016, frustrating hopes of a recovery. But, as Sara Hemrajani reports, some think there are signs of green shoots even as the pressure mounts on President Michel Temer and the central bank to do more to promote growth.

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Brazil's famous samba spirit recently on display at carnival. But there haven't been celebrations where the economy is concerned. The country has plunged even deeper into its worst ever recession. GDP contracted by 3.6 percent in 2016, taking a hit from weaker-than-expected figures in the final quarter of the year. Brazil's government is now looking to reassure, saying the downturn is bottoming out. (Soundbite) Henrique Meirelles, Brazilian finance minister, saying (Portuguese): "The economy is already in the rhythm of recovery, and so the idea is to maintain that rhythm, and we will trace a methodology for labor for the next few years." Officials point to indicators like improving farming output and car production. But many are frustrated with the slow pace of reform. (Soundbite) Justin Urquhart-Stewart, Head of Corporate Development, Seven Investment Management, saying (English): "The trouble with the Brazilian economy - you may look at green shoots, it may easily turn out to be advanced mould. When you see the problems that occurred, this economy is primarily, of course, based on commodities and obviously not coffee, it's iron ore and obviously petroleum as well. So the problems they've had have been there for several years. But Brazil's got a huge issue - I never thought I'd be in a position where people were actually comparing Brazil and Argentina and preferring Argentina." Brazil's economic crisis has left nearly 13 million unemployed and fuelled angry protests. That's putting extra pressure on policymakers to deliver on those promises of a recovery.

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When can Brazil escape deep recession?

Wednesday, March 08, 2017 - 01:32