Brazil falls into a deep recession: Causes

It seems that Brazil
He is about to go bankrupt. The country's currency
falls sharply, unemployment rises, and
the stock market fell by 20%
compared to last year. Besides,
Brazilian President Dilma Rousseff has
very low approval rating - only
8%, this has not been since 1992, when President
Brazil has been brought to justice.
Following a major economic stories
the success of Brazil was plunged into recession.

A country's economy
It decreased by 1.9% in the second quarter
Compared with the first. This is the second
consecutive quarter, when the figure
negative. "almost everything
turned down"- says Neil
Shearing, chief economist for emerging
Markets at Capital Economics. Compared with the
same quarter last year, the economy
Brazil decreased by 2.6%, and
Today it is the worst performance.

Here are the main causes,
why Brazil has the second most
largest economy in the west ??
hemisphere after the United States, currently
in a recession:

1. Exports from Brazil to
China was undermined over the last decade.
Now that China's economy is slowing,
the country will buy even less
goods and raw materials in Brazil.

2. State
Brazilian oil company Petrobras fell
in a massive corruption scandal,
associated with many members of the party
Ms Rousseff. Big scandal
money laundering touched oil,
business and political leaders in the country.

3. all major Rates
Brazilian products - butter, sugar, coffee,
metals - has collapsed. These goods are
the driving force of the Brazilian economy, and
they quickly lost value.

The recession also came
against the background of how Brazilians spend
mass protests calling for the impeachment of Rousseff. While corruption and
It is not something new in Brazil, but
its scale in Petrobras became too
outstanding. Petrobras officials said
recently, the company lost $ 2 billion
only because of bribes. In July, scandal
Force: Brazilian police arrested
electric department managers
Electrobras, accusing them that they, too,
related to money laundering in Petrobras. When
The investigation began to dig deeper, we find more and more officials
from other agencies, "tied" to the
this corrupt scheme.

Despite
that is just one corrupt
scandal, he is very much undermined confidence
to business. investments decreased
almost 12% in Brazil in the second quarter
on an annualized basis, according to Capital
Economics. the country's currency - Brazilian Real
- has lost almost 25% of its value
against the dollar this year. Import
the country also fell by about 12%
compared to last year.

For Brazilian companies,
who occupied the dollar fall
currency complicates repayment
debt. But in the long run
low exchange rate can help,
Shearing says. Countries all over the world -
in Asia, in Europe - using devaluation
currency to make exports more
attractive to foreign
buyers and encourage local residents
buy products made in the country.
Brazil exports grew by 7% year on
expression. But it is too early to
worry. Analyst warns
that the current export - nothing more,
than "flash of hope" for
economic future of Brazil. AT
Nowadays, it seems, the economy
Brazil, already in recession, and
it could last into next year,
They say most experts.