Brazil the country that is hosting the 2016 summer Olympics, It will be hosted in the city of Rio De Janeiro in the next 60 days. The country has the largest economy in Latin America. The figures released on Wednesday shows that the economy shrank by 5.4% of the first quarter this year.
The President of Brazil Dilma Rousseff was temporarily suspended last month by a congressional impeachment vote. Michel Temer who used to be the vice president is now the interim president. Analysts predicted that the first quarter will be worse than what the outcome is. The reason why the first quarter did not shrink below what analysts forecast was due to the impeached president increasing government increasing government spending in April to win the support of the public. In Brazil today, inflation has gone up, consumer confidence has declined coupled with the corruption scandals within public officials. Is this going to be Brazil’s longest recession since 1930?
Government officials announced that unemployment went up to 11.2% between April 2015 to February 2016. About 11.4 million Brazilians are unemployed. The recession started in 2015 when the prices of commodities fell. The commodities are the engine to Brazil’s growth. Another factor is the corruption scandals at the state run oil companies, petrobras, engulfed politicians of all stripes and many business owners.
The Zika virus is raising concerns with Rio hosting the Olympics games. Officials of the games say that facilities are almost ready and are confident of hosting a successful Olympics. The political crisis is in contrast to the positive feedback heard about the Rio Olympics. The Interim President Michel Temer encountered some setbacks; two of the Interim President appointed ministers has resigned due to corruption acquisition just three weeks into office.
A phone call recording was leaked on Sunday which was a conversation between the new transparency minister, appointed to battle corruption in the country and a senator on how to dodge corruption probe. The minister Fabiano Silveira stepped down on Monday. The Planning Minister Romer Juca resigned last week when recordings were revealed that showed him trying to obstruct federal investigation
A forecast done by Brazil’s Central Bank shows that the economy will shrink by 3.5% all year compared to last year in which the economy contracted by 3.8%.