2014 Brazilian economic crisis
From mid 2014 to 2016, Brazil experienced a severe economic crisis. The economic crisis became 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 the first quarter of 2017 the GDP rose 1.4%, finally ending the recession. 
Brazil's economy depends on the exportation of commodities, especially iron ore, petroleum, and soy. There was a significant increase in the price of those commodities from the late 1990s until 2012. That was due in part to the increasing demand of China. That period was, therefore, a favorable time in Brazil's economy. The left-wing government of Lula enjoyed the opportunity to redistribute wealth via welfare programs and by increasing the minimum wage, seeking to increase consumption.
Slowdown of the Chinese economy and fall in commodity prices
According to Steve Tobin, who works in the International Labour Organization (ILO), the decrease of the external demand, particularly from China, plus the fall in the prices of commodities, contributed to the crisis. However, according to Tobin, this unfavorable international scenario ended up revealing structural weaknesses of the country, such as low productivity.
Errors in the macroeconomic policies
According to a minister of the cabinet of ex-president Lula, there was excessive spending and subsidies in Dilma's government, which generated an increase in the national debt and the debt of families. Gustavo Franco, former president of the Central Bank of Brazil, affirmed that the causes of the crisis were entirely self-inflicted, and they were related to "faulty local macroeconomic measures that went wrong".
In the same year the crisis began, a major corruption scheme was discovered and was being investigated in the Operation Car Wash, which involved top politicians and huge companies, such as the oil giant Petrobras. It is estimated that Car Wash caused a contraction in the GDP of Brazil of 1 to 1.5%. 
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. 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.
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." 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 government expenses have been growing constantly.
|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|
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 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.
In June 2017, a 1% rise in GDP in the first quarter of the year was reported. It was the first rise of the GDP after eight consecutive falls (two years). Minister of Finance Henrique Meirelles said that the country had exited the "greatest recession of the century". 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.
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