Out this morning, third-quarter GDP grew 0.6% seasonally-adjusted form the second quarter, much lower than the market estimates of 1.2%. Early this year, analysts forecast about 4% growth for 2012. Austin revised its numbers to 0.9% (if everything goes well).

 “Today’s report was awful,” Neil Shearing, who was forecasting below-consensus 1 percent growth as chief emerging markets economist for Capital Economics Ltd., said by phone from London. “The really disappointing thing about today’s data is that despite all the policy stimulus over the past year, it’s clear the economy is still struggling to get going.”

“After so much stimulus, investment is even worse than in the second quarter,” Pedro Tuesta, senior Latin America economist at 4Cast Inc., told Bloomberg. “If investment doesn’t rebound, then we are in trouble in 2013.”

Wishful thinking

While the GDP number was not what the government was hoping for, the economy is accelerating and will expand by 1 percent in the fourth quarter, Finance Minister Guido Mantega said. The government is maintaining its forecast for 4 percent growth next year, he said at a news conference in Sao Paulo.

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22 Responses to Brazil GDP Grows at HALF Forecast Pace (we’re not making this up)

  1. Dnrnova says:

    Reality of a new scenario is coming very fast, now Brazilian politician and its society will have to swallow them down the throat.

    Now we are at the mercy of ours politicians and policy makers with a society which do not know what is the real meaning of being united.

    Goverment didn’t care about education in the past, lets see if they’ll have time and will to educate until the future favorable financial situations.

    But, is there a credit bubble in the economy?That really could be a threat to Brazil’s development process, Brazil could repeat 80′s and 90′s.

    if the country really depends on its people I’m quite afraid about the future..

    But I still have some hope.

  2. Livinginthebubble says:

    Why isnthe country not growing?

    Simple no one has an incentive to work…..

    Let me explain. When you have a limited educated labour force, who demand salaries far above their global scale, with the value of their property doubling in the last few years, together with the lowest interest rates they have seen, combined with inheritance tax at 4% why do the ‘educated’ class need to think about aiding Brazilian growth?

    Also when they have the excuse of the World cup and Olympics coupled with a business environment which is less efficient then Pakistan and Albania the view is let’s leave it to someone else……..

    When you live in a country where you have an ‘empregada’ (domestic health) to wipe your …….. and a government with an interventionists policies the economy will not move forward.

    I live Itaim, Sao Paulo, and see this on a daily basis.

  3. ShortStop says:

    With no political will to address the difficult structural problems Brazil has, it will take a lot of cheerleading (hopefully without the Mantega fella) to turn things around in 2013. I can’t see how international investors will make the same mistake with Brazil yet one more time.

    Mantega has to have the minimum decency to go. Brazil certainly does not need this type of spokesman clown.

    Kudos are in order to the Nomura boys for having been steadfast and really staunch all year round with their forecast and analysis. They deserve to have capitalized on their knowledge. Hopefully, those JPMorgan ‘woo-hoo’, ‘buy-Brazil-long-and-pay-me-a-commission’ analysts will not be heard for a while.

    If those ‘gurus’ in Brazilia traveled a lot more and read what has transformed entire agrarian and backward countries into current higher-labor-productivity powerhouses in just a matter of a few decades. But now this is really asking for too much.

    Those structural changes required cannot wait to get addressed. Otherwise more of the same will come back again.

  4. Carlos Azevedo Junior says:

    I would love to understand how they made the forecast for next year.

    The overall sentiment globally is for a challenging 2013 with some possibilities of severe contraction on the second and third quarter.

    If the economy is struggling now when all seems to be going according to plans, it would be very interesting to know how the government sees the situation changing so swiftly, so fast.

    Again, performance below par. While facts are here, undeniable, we are instructed or advised to IGNORE NOW and look at the bright picture at the end of a uncertain Horizon.


  5. frank stein says:


  6. Brazil says:

    Brazil is doing fine, you really are going to compare it to Western Europe and the USA–where they keep adjusting figures every few months, downwards!? I just moved to RJ from NYC, there are definitely a lot of better opportunities here . . .

    GDP excludes a great deal of production that has economic value. A mundane example of why it doesn’t always work: If you let the sun dry your clothes, the service is free and doesn’t show up in our domestic product; if you throw your laundry in the dryer, you burn fossil fuel, increase your carbon footprint, make the economy more unsustainable — and give G.D.P. a bit of a bump.

  7. Rodrigo Rodrigues says:

    Yes, The median income of a Brazilian family had increased on the last few years ,but  How about  the amount of personal debt?  .Is this a improvement or merely conspicuous consumption? Unless this family used the debt to purchase an investment that has held its value or increased in value, all that has occurred is conspicuous consumption and a substantial drop in the family’s net worth.
    In the case of the Brazilian economy that is primarily what has occurred. In the case of a family, instead of focusing on what they spend (the GDP approach) we focus on their net worth. Are they becoming wealthier or poorer. Why don’t we focus on net worth to measure the state of the economy? Is there any surprise that government encourages you to spend? It may make you worse off but it makes GDP look better.The fraud is that GDP measures spending, regardless of debt or inflation.A country is like a family. It is not better off because it spends more. It is better off when its wealth increases,  The proper measure of well-being is Net Worth, which is often negatively related to spending.We must use common sense, educate ourselves and not trust the headlines,
    Saving is not a sin. It is the accumulation of capital and the way we invest our money wisely ( includind on education)that makes us wealthier . This capital can only occur from deferring consumption — saving. for inflation. If inflation was accounted for, there would be almost no GDP growth . They have to make the numbers look good, It’s all done for political reasons , PT( Partido dos trambiqueiros)  will start to play a new game with the Brazilian currency, they must create a new bubble, The reality is, the industrial age is coming to an end, because of resource depletion.The World is  not in a recession or a depression, we’re somewhere at the beginning of a permanent contraction.
    That’s why so many bubbles had been created on the last few years.

  8. PIB brasileiro é uma piada que se tornou vexame

  9. Tarik says:

    Mantega is an idiot. Worst than Bernanke. Thanks God he has a smaller helicopter.

    Brazil is ready to grow 4% next year. Maybe even more.
    All that they have to do is to leave the economy alone, and stop playing economic nationalism with the big corps.

    They could also try to reduce innefective government programs, but this would be too much to ask from Dilma and her zombies.

  10. armand says:

    Brazil is fine. Its experiencing a gigantic relative repricing which will curb domestic consumption and tilt the balance onto capital spending but this takes some time. FX, interest rates, labor. Its not obvious from where we stand right now but over time the consequences will be huge. The clowns in Brasilia are living proof of this countrys resilience to stupidity. they work real hard to thrash it to no avail.

  11. Tomas B. says:

    Why everybody is worrying about the Brazilian problems? You should be celebrating that, like PT, PSDB and other parties do.
    Rich (or competent) people in Brazil didn’t get rich by taking advantages of the “Brazilian qualities”, they actually got rich taking advantage of the Brazilian disgraces:
    - Awful public transportation/Heavy traffic/No roads = speculative real estate prices in better locations;
    - Not enough qualified professionals = 200k/moth salary to civil engineers etc;
    - No/delayed infrastructure = overpriced constructions everywhere;
    - Illiterate voters = corrupt and most expensive and inefficient politicians in the world;
    - Street Crime = best distraction ever to hide the real big criminals in the backstage;
    - etc….

    We are not talking about a country where you can invent, build or develop a great solution to help people’s lives and be financially and socially rewarded because of that.
    This country wants to keep being a colony, bring down the mirrors, we’ve got gold…

  12. gringo says:

    Brazil you are an idiot. You “just” moved from NYC to RJ. WTF do you know about Brazil.? If you solution is that the citizenry should dry its clothing in the sun then you are going to join the growing problem of lack of education in Brazil.

  13. Samuel 2 says:

    Brasil, where you can buy a pair of Havaianas in 10 easy monthly payments. LOL

    Brasil is a cash cow for the Banco Central.

  14. Jose Angel says:

    Why is Mantega still in the job? obviously he got it wrong time and again. Early in the year he predicted a 4% growth for 2012, then by the second quarter he was laughing at international banks which projected Brazil’s economy to grow 1.5%, called them clowns or something like that. And even after a disappointing third quarter he was still insisting on achieving a 4% growth. What’s wrong with this guy?

    You can have a finance minister living in a fictional economic world.

  15. Rodrigo Rodrigues says:


  16. Ailton says:

    Rodrigo Rodrigues said it all. ;-).
    Now, does anybody know how citizens can protect themselves from the Stagflation?

  17. JuanArgentina says:

    Rodrigo Rodrigues

    You are silly man.
    What does Argentina have to do with the price of real estate in Brasil

  18. The bubble says:

    Just sell Brazil. Bad country, bad education, bad prices, bad stock prices, bad everything.
    Since discovery it is a “small country”. There are good times and bad times in all history.
    Now at the middle or end of a good time.
    Just this.

  19. Rodrigo Rodrigues says:

    Brazilian Bubble moderator please block this would be impersonator .

  20. frank stein says:

    I agree Brazil will be going the way of Argentina and Venezuela. The PT style is cleptomarxism.

  21. Rodrigo Rodrigues says:

    Thanks The bubble, I just sold my Brazilian shirt I someone gave me last Christmas.
    What do you want me to sell next?

  22. Mertens says:

    No workers party feast last forever .

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