Brazil’s Economy Slows Down Before World Cup

Brazil’s economy grew 0.2% in the first three months of 2014, official statistics show.

The Brazilian Institute of Geography and Statistics also revised down economic growth in the last three months of 2013, to 0.4%.

The sluggish growth figures come just before the start of the World Cup and presidential elections in October.

President Dilma Rousseff, who is seeking re-election, has said the football event will spur growth.

But high inflation and low business investment have put a damper on the expected lift from government investment in projects leading up to the sporting event.

This has spurred protests from Brazilians angry over the expense of the World Cup and the lack of trickle-down growth.

Business investment fell 2.1% in the first three months of 2014, the biggest decline in two years.

“I couldn’t find anything positive at all in the [data],” said Bruno Rovai at Barclays.

Brazil, which is Latin America’s biggest economy and the world’s seventh largest, has suffered from stubbornly high inflation, which remains at 6%, above the central bank’s target.

On Wednesday, the central bank kept its key interest rate at 11% in an effort to combat rising prices.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza