Brazil climbs out of recession for first time in two years

2 Jun 17

Brazil has emerged from the worst recession in its history, reporting instead its fastest growth rate in nearly four years.

 

The country recorded GDP growth of 1% in the first quarter of 2017 compared to the one preceding it – the biggest rise since 2013 – data published yesterday showed.

It follows two years of negative growth, which saw the country’s economy shrink by almost 8%. But analysts believe the growth spurt may be short-lived as it was driven by factors such as an unusually strong harvest of some crops.

Nevertheless Brazilian president Michel Temer sent a celebratory tweet after the news broke, declaring the recession over.

 

Translation: "The recession is over! This is a result of the measures we're taking. Brazil has grown again. And with reforms it will grow even more."

 

The figures are likely to bode well for the president, who has promised to fix the economy but in recent weeks found himself subject to corruption allegations.

Temer came to power to replace former president Dilma Rousseff, who was impeached following a major corruption scandal that embroiled much of the upper echelons of Brazilian business and politics.

The allegations against Temer centre on a leaked tape recording of him discussing the payment of hush money to a jailed politician who is a witness in the inquiry into the scandal.

Temer has denied the charge and said the tapes were “doctored” amid growing calls for his resignation and tumbling stock prices as markets shook from the news.

His premiership had already endured a somewhat rocky start, as Temer tried to implement a strict plan to get the country’s economy and finances back on track.

Planned reforms to the pension system and increases in the retirement age were met with strong opposition and a general strike.

But Temer has said the country’s first quarter growth was down to the implementation of his economic reforms, and the positive data are expected to shield the president from calls to leave his office.

Oliver Jones, analyst at Capital Economics, said the country’s political situation “clearly... remains a threat”.

However, he noted that even if Temer were ousted, as long as key figures like finance minister Henrique Meirelles remained in place there would still be a “good chance” that Temer’s reform programme would survive in some form. 

  • Emma Rumney

    Emma is a reporter at Cooking Recipes International. She also writes for in the UK.

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