(MENAFN- The Peninsula) The Brazilian economy, the world's seventh-largest, posted near-stagnant growth in 2014, expanding just 0.1 percent, the government said Friday, as inflation and a massive corruption scandal took their toll.
Hosting the World Cup in June and July and gearing up for the Olympics next year failed to reverse the drag of soaring prices, a ballooning deficit and a $4-billion kickbacks scandal at state oil giant Petrobras that has tarnished Brazil's largest company and President Dilma Rousseff's party.
It was the fourth year of lackluster growth for the South American giant, whose economy expanded 2.7 percent in 2013, 1.8 percent in 2012 and 3.9 percent in 2011, under a revised calculation system that took effect this month.
Rousseff has never managed to match the blistering 7.6-percent GDP growth Brazil posted in 2010, the last year in office of her charismatic predecessor and mentor, Luiz Inacio Lula da Silva.
The central bank is expecting an even worse year in 2015, forecasting a contraction of 0.5 percent.
"Looking forward, the questions are how deep will the recession be in 2015, when will Brazil start to recover and how fast," said Robert Wood, Brazil analyst at the Economist Intelligence Unit.
Analyst Alex Agostini, chief economist at Brazilian firm Austin Rating, predicted modest growth of around one to two percent in 2016 before a return to stronger growth of about 2.5 percent in 2017.
"There's been a breakdown in recent years from the inflationary, fiscal and exchange-rate standpoint. There was no external policy to stimulate competitiveness, no international agreements to stimulate exports," he told AFP.
Agostini predicted India, whose economy is growing at an annual rate of more than seven percent, would surpass Brazil this year as the world's seventh economy.
Of the BRICS group of emerging economies - Brazil, Russia, India, China and South Africa - Brazil posted the lowest growth for 2014.
Russia's economy grew 0.6 percent, China's 7.4 percent and South Africa's 1.4 percent.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.