2014 Brazilian economic crisis

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January 2016 cover of The Economist magazine about the crisis. The cover depicts then-current president Dilma Rousseff
Change in GDP from 2010 to 2016 in Brazil.[1] Growth slowed significantly in 2014 which was followed by two consecutive drops.

Brazil was experiencing an economic crisis, which started in mid 2014 and ended in 2016.[2][3] The economic crisis is coupled with a political crisis in Brazil that resulted in the impeachment of president Dilma Rousseff and in widespread dissatisfaction with the political system.

In 2015, Brazil's gross domestic product (GDP) fell by 3.9% due to a drop in salaries, restrictions on credit and a rise in the basic interest rate. In 2016, Brazil's GDP fell by 3.6% with reductions across all sectors of the economy. It was the first time since 1931 that the GDP had fallen in two consecutive years. In 2017 first quarter the economy up 1.4% and the recession had finally ended. [4]


Before the recession, Brazil's unemployment rate hovered around 6.8% for most of 2014 and had been generally increasing since February 2015, averaging 8.5% in 2015. The economy lost more than 1.5 million jobs throughout 2015, fueling public discontent against the political establishment and the political leadership of the Worker's Party and President Dilma Rousseff.[5] The unemployment rate continued to rise throughout 2016 to finish the year at 12.0%, with 12.3 million people unemployed and an estimated 2.8 million private sector jobs cut over the preceding two years.[6]

Budget deficit[edit]

Brazil is currently experiencing a fiscal crisis and an increasing budget deficit which, according to Bloomberg, has been "the largest-ever primary budget gap ... as a two-year economic recession sapped tax collection while expenses grew further."[7] The government deficit reached 5.8 billion reais (U$1.7 billion) in the first three months of 2016, the widest reported since December 2001. The two-year fiscal deterioration can be explained by the decrease in government revenue from taxes as a result of the recession, while expenses from government have been growing constantly.[8]

Credit rating[edit]

This is a table of the credit ratings of the Brazilian economy according to Trading Economics.[who?][citation needed]

Agency Rating Outlook Date
Fitch BB negative May 5, 2016
TE 34 negative Apr 16 2016
Moody's Ba2 negative Feb 24 2016
S&P BB negative Feb 17 2016


Inflation Rate by
Year Inflation Rate (IPCA)
2002 12.53%
2003 9.30%
2004 7.60%
2005 5.69%
2006 3.14%
2007 4.46%
2008 5.91%
2009 4.31%
2010 5.90%
2011 6.50%
2012 5.84%
2013 5.91%
2014 6.41%
2015 10.67%
2016 6.29%


Since the impeachment of Dilma Rousseff and the subsequent rise of Michel Temer to power a variety of projects, many of which seen as unpopular, were proposed in order to get the economy back on track. In early 2017, there were already signals that the economy was beginning to recover, however, it was agreed that the process would be long and slow.[10][11]

In June 2017, a 1% rise in GDP in the first quarter of the year was reported.[12] It was the first rise of the GDP after eight consecutive falls (two years).[13] Minister of Finance Henrique Meirelles said that the country had exited the "greatest recession of the century".[14] However, economists say that the growth characterizes only the end of the "technical recession" and that it is still too early to claim that the crisis is over, given that unemployment remains high and there's still widespread uncertainty regarding the future of the economy, especially in the aftermath of the recent political scandals.[15]

See also[edit]