Brazil has been in recession for two years, which is the deepest economic decline since records began. The Brazilian economy contracted by 3.6% in 2016, thus, it is now 8% smaller than it was in 2014. There are almost 13 million unemployed people in Brazil.
The country has been hit by the fall in commodity prices and a political crisis that has undermined investor confidence, but analysts believe the economy should start to pick up. The BBC states that the two-year recession in Brazil has seen the number of unemployed rise by 76% to 12.9 million, a rate of 12.6%.
Brazil was once one of the fastest-growing economies in the world, the 'B' in the Brics group of nations that have a great potential for growth. Brazilian exports such as oil, soy and metals were in hot demand.
Factors of the economic crisis
The Chinese economy began to slow and also its demand for commodities, thus, the prices of these goods fell. Another key factor has been corruption, President Dilma Rousseff illegally manipulated government accounts, in a scandal that has involved some of Brazil's biggest companies.
Twenty-four consecutive months of recession is a social disaster for an emerging country like Brazil. The number of unemployed people increased to over 12 million people in a short period of time. The number of unemployed in Brazil is bigger than the populations of countries like Portugal or Greece.
But there are some good signs that this recession may be over. The inflation rate in Brazil suggests prices in the economy are stabilising, and interest rates are falling faster than expected. This could boost consumption and investment and speed up Brazil's recovery.
Besides, prices of commodities are on the rise again because of possible growth coming from the US. But much of Brazil's recovery depends on government reforms related with public spending.