Tight Monetary Policy in Brazil is Prolonging Recession

February 23, 2017

David Rosnick

After a year of zero growth over 2014, Brazil’s economy shrank nearly 6 percent in 2015, and another 3 percent over the first three quarters of 2016. Gross Domestic Product in the third quarter was only 0.7 percent greater than in the same period of 2010. Yet over those six years, the working-age population grew about 8 percent.

Domestic demand has collapsed. From its peak at the start of 2014, Brazilian demand for real goods and services has fallen nearly 11 percent, subtracting 4 percentage points annualized from real GDP growth.

For more, check out the latest Latin America Data Byte.

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