Brazil’s gross domestic product shrank by 3.8 percent in 2015 against the previous year, the steepest decline since 1990, the Brazilian Census Bureau (IBGE) said Friday. In 1990, GDP plunged 4.3 percent in the face of hyperinflation and drastic government measures, including a freeze on many bank accounts, to combat it. Friday’s figures showed four straight quarters of decline in 2015. Fourth quarter GDP put in the worst performance, declining 1.4 percent against the third quarter. In 2014, GDP managed to eke out a gain of 0.1 percent. Most economists are forecasting another decline in GDP for 2016 on the order of 3.5 percent to 4.0 percent, with possibilities for a modest recovery only in 2017. If so, two years in a row of declining GDP would mark Brazil’s worst recession since the 1930s. According to economists, Brazil’s economy plunged into recession last year because of heavy accumulation of debts by both consumers and the government. Harsh economic conditions, including a steady rise in unemployment, have been accompanied by persistent inflation. Inflation, now running at nearly 11 percent, has brought stiff increases in interest rates, further exacerbating the recession. Brazil’s base interest rate now stands at 14.25 percent.
Link to IBGE releaseMore Testimonials