Uncertainty looms as Brazil bids farewell to another lost decade
By Alba Santandreu
Sao Paulo, Jun 30 (efe-epa).- Brazil, once the shining hope of the BRICS economies, has been embroiled in a web of political corruption and deep economic crises that has left a near-bankrupt state on the verge of economic collapse.
The most optimistic projections foresee a 6.5 percent drop of GDP in 2020, while the International Monetary Fund (IMF) suspects the dramatic collapse will be closer to 9 percent as a result of the Covid-19 crisis.
Brazil is set to end the 2011-2020 period with an average annual contraction of between 0.1 and 0.3 percent, according to the Brazilian Institute of Economics of the Getúlio Vargas Foundation (FGV).
The South American giant seems doomed to record its second lost decade in the last 40 years, despite having huge reserves of hydrocarbons and having one of the most powerful agricultural sectors on the planet.
Between 1981 and 1999 Brazil registered its lowest historical growth at 1.6 percent and was battered by hyperinflation, external crises and internal political turmoil.
1985 paved the way for a transition to democracy after a 21-year military dictatorship.
“Even if the coronavirus crisis had not arrived, the projections for February indicated that GDP would grow by 2 percent this year. Even so, it would be a lost decade, the worst in the last 120 years,” Marcel Balassiano, author of the FGV study, tells Efe.
At the beginning of the decade, Brazil, then governed by leftist Luiz Inácio Lula da Silva, aspired to become a global power.
Like other emerging countries, the country breezed through the 2008 global financial crisis, and after a timid contraction in 2009, its economy grew by 7.5 percent in 2010 thanks to the raw materials boom.