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Brazil is financially ruined, under recession

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August 31
7:54 AM 2015

Whether Brazilians like it or not they are again headed for their worst economic crisis. The government reported Friday that the country's gross domestic product (GDP) had plunged 1.9% in Q2 alone and once again putting the nation into a technical recession.

Brazilian President Dilma Rousseff is now faced with left and right calls asking her to step down from her position.  She has the worst approval rating for any president since Brazil's return to democracy in 1985. She pushed restraint on payroll-tax breaks via Congress, to help cut the fiscal deficit.  The government added that would close ten of its 39 ministries.

Adding to the souring consumer confidence are the rise in inflation, unemployment and the tightening of personal credit.  There are recent reports that made the analysts worried because her Vice-president, Michael Tremer, a member of PMDB, is relinquishing the job of coordinating the government's dealings with Congress.

Much of Brazil's problems arise from the widespread bribery case of the state-owned oil company Petrobras. The story has enveloped the country and hurt the company, which is a large contributor to its economy.

Eduardo Cunha who is the powerful speaker of Brazil's lower house congress has been charged by Rousseff's attorney general regarding the millions of bribes in connection with a creeping corruption scandal of Petrobras. According to polls, he is also the man who can call for a vote of impeachment in the Chamber of Deputies against the president wherein two-thirds of Brazilian population says they want to see happen.

American Credit rating agencies class Brazil's debt one step above junk territory.  Brazilians suffer every day due to real's (Brazilian's currency) decline in value which is quickly going down.  It fell to 24% against this year to its lowest point since 2003.

"The problems that Brazil's economy is facing have likened into a perfect storm," says Brian Winter, vice president of Council of the Americas.  This Sunday's protest could likely be the biggest during Rousseff's administration, he said.

This Sunday, a Brazilian nonprofit is to organize a mass protest, partially calling for the president's impeachment.  The protests are scheduled in every Brazilian city, and across European cities and the U.S.

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