The Brazilian Ego Falters Along With Country’s Economy
Just a few months ago, Brazil's government dreamed of a 4 percent economic expansion for 2012. With second-quarter statistics in -- GDP grew just 0.4 percent over the first quarter -- theCentral Bank now says expectations are that the year will close on a figure of 1.64 percent.
That would be a comedown even from last year's disappointing 2.7 percent and a staggering drop from 2010's impressive 7.5 percent.
This is despite recent tax breaks for industry, interest-rate cuts to the lowest level ever (7.5 percent), and an ambitious investment plan for the country's faltering roads and railways.
The news deflated hopes that Brazil had pulled out of the doldrums. Beyond that, it was a blow to the nation's collective ego. Ordinary Brazilians are unusually obsessed with their economy, until recently a source of great pride. The euphoria felt in December when Brazil overtook the UK to become the world’s sixth-largest economy turned to disappointment when the Economist Intelligence Unit wrote that the countries had again swapped positions.
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