Comments by Filipe Pacheco (via Sourcing Brazil):
For a long time analysts have considered Brazil a land immune to the harsh financial crisis that has been punishing developed economies but numbers have been showing otherwise. Surprisingly, the segment of the economy that gave the most support to the Brazilian GDP figures was the export sector, which grew 1.8%. Domestic demand fell 0.1% in the quarter, while government expenditures fell 0.7%. Investments in general dropped 0.2% and imports shrank 0.4%.
This is the first time Brazilian economy hasn’t grown since the beginning of the international financial crisis, which started in September of 2008. With these results, most economic analysts now consider it will be impossible to reach growth greater than 3% for this year, and also hard to advance to 3.5% in 2012 – and basically impossible to reach the 5% forecast by the government for next year. The numbers are considerably lower than the 7.5% growth that marked the year 2010.
The domestic market now expects the government to act, mainly by reconsidering a series of measures intended to avoid an overheating of the economy.