A couple of years ago, it would have been a near laughable prediction – but the four countries comprising the vaunted bloc of emerging economies known as the BRIC’s (Brazil, Russia, India, China) continue to move in the wrong direction as the new global downturn shows increasing signs of taking hold. And Brazil has the dubious distinction of being the most disappointing of the bunch, per statistics released late this week.
Brazil’s Instituto Brasileiro de Geografia e Estatística unveiled third-quarter statistics that show growth tracking at just about half of its forecast expectations. IBGE noted the following on its website:
Compared to the second quarter of 2012, the GDP (Gross Domestic Product) of the third quarter grew (0.6%) in the seasonally adjusted series. The greatest highlight was agriculture and livestock farming, which grew 2.5%, followed by the industry (1.1%). Services had no change. In contrast with the third quarter of 2011, the GDP grew 0.9% and, among the economic activities, agriculture and livestock farming (3.6%) and services (1.4%) stood out. The industry fell 0.9%. In the accumulated in the four quarters ended in September 2012, the growth was of 0.9% in relation to the first four immediately previous quarters, whereas in the accumulated of the first three quarters 2012, the GDP grew 0.7% in relation to the same period in 2011. The GDP in current values reached R$ 1,098.3 billion.
Notably absent was talk of its natural resources activities, which were expected to provide a boon for the key Latin region economy. The again disappointing performance is starting to reignite concerns raised shortly before the election of Brazilian President Dilma Rousseff. Rousseff, before her more mainstream political career, was known as a pro-labor leftist, leading market-watchers to wonder publicly if she was the right person to guide a period of hot business/economic growth for a nation known to often shoot itself in the foot with poor, inflation-boosting policies. Granted, Rousseff’s more activist roots from decades ago could be a red herring for her detractors, as the European Union massive debt crisis is having an impact on the economic prospects of nearly ever developed economic superpower and very well could have a lot more to do with the deteriorating strength.
-Brian Shappell, CBA, NACM staff writer