Brazil’s economy has experienced a severe downturn since 2011, after almost a decade of growth and a short-lived recovery from the 2008–2009 global financial crisis in 2010 (Figure 8.1). This economic slowdown has been triggered by weaker international commodities markets, on which Brazil is highly dependent, coupled with the perverse effects of economic policies designed to fuel consumption. The latter eventually caused government spending to overtake revenue by a large margin: in 2014, Brazil had a primary deficit of over 0.5% of GDP for the first time in 16 years; this deficit has helped to push annual inflation rates to over 6% since 2013. Brazil’s economy stagnated in 2014 (0.1% of GDP growth) and the outlook is even worse for 2015, with the Ministry of Finance forecasting in April this year that the economy would contract by 0.9%.

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