Brazil’s economy posted surprisingly good numbers for the fourth quarter of 2013, renewing hope that the country’s economic fortunes can turnaround. Brazil had seen its GDP contract by .5% in the third quarter, leading some analysts to speculate that the country was headed for a recession. The new numbers for the fourth quarter show that the economy grew .7% from the previous quarter and 2.3% over the entire year, numbers that no one expected to see. This news brings some relief and encouragement to Brazilian officials, who currently have their hands full with issues surrounding the economy, protests, and major upcoming sporting events.
Brazil’s economy has been in a slump since 2010, a year in which the economy grew by an impressive 7.5%. Those numbers put Brazil in the same class as major emerging markets China and India, leading many to believe that the country was in line for major growth. Along with the growing optimism, the country had recently been selected to host two major sporting events, the 2014 World Cup and the 2016 Summer Olympic Games. Brazil’s selection for two of the World’s biggest sporting events was seen as a symbol of the country’s growth and emergence as a major player in the global economy.
This momentum for Brazil and its economy slowed in 2011 and came to a halt in the past two years. Brazil only saw 0.9% growth in 2012 after forecasts had predicted growth around 4.5% at the beginning of the year, and 2013 brought worries about a possible recession. Along with these economic woes, the country has been beset with protests over the standard of living in Brazil and construction projects for the World Cup and Olympics that are running behind.
All these problems have put Brazil and its government officials in a negative spotlight, only a couple years after the country was being praised for its economic advancement. President Dilma Rousseff has taken a lot of heat for the economies decline, with elections coming up in nine months, the recent growth numbers are a welcomed relief. The important thing for Rousseff and Brazil will be how the economy progresses from here, and if the country can implement structural reforms that will bring about future, sustainable growth.
Brazil is the largest economy in South America, and it has a large impact over the region’s economic growth. Brazil and its economy are important to other South American countries that have large trade networks with Brazil, and a strong Brazilian economy can inject more global confidence into the whole continent. This highlights another reason to look closely at Brazil in the coming years, and to see how the country tries to return the economy to 2010 levels. Officials hope that government reforms can bring about this turnaround, and so that when the world tunes in for the World Cup and the Olympics, they will once again see a growing country with high hopes for the future.