The BRICS (Brazil, Russia, India and China) are the flagship of dynamic emerging countries, but the reputation is currently a bit tarnished. Only India seems to be accelerating after the injection of confidence given to the new Modi government. But Russia sees the ruble devalue and is entangled in the complex Ukrainian affair, while China is undergoing a slowdown, albeit a physiological one. Brazil even slips into recession, after two quarters of negative growth.
Naturally, the government defends itself, and the finance minister, Guido Mantega, says that we are not really in a recession, given that unemployment is not increasing (but forgetting that the unemployment rate is a lagging indicator of the cycle). Private consumption, however, is still in positive territory; it is investments that are falling, as is public spending.
Perhaps things will pick up after the upcoming election, and businesses are waiting to hear the outcome before making plans for capital expenditures. Meanwhile, the weakness of the economy favors the opposition: there could be a ballot between two women, the outgoing president Dilma Rousseff and the challenger Marina Silva.
During Rousseff's presidency, growth averaged 2%, half of that recorded during the presidency of Rousseff's mentor and predecessor, Lula da Silva.
Attachments: Rio Times Online
