Recession over in Brazil

In what may be a promising sign for Latin America’s ailing economy, Brazilian officials claimed that the country has emerged from its recession.

Brazil’s gross domestic product during the second quarter rose by a better-than-expected 1.9%; thus, officially ending a recession that lasted less than a year. Some analysts warned that Brazil’s economy still faces serious difficulties, such as an estimated contraction in GDP for 2009. Yet Finance Minister Guido Mantega emphasized that “Brazil is one of the most quickly recovering economies in the world” and that third quarter GDP should also grow.

How did one of the world’s most emerging countries pill itself out of recession? There are several reasons according to one economist:

Six straight months of job growth, coupled with tax breaks and record low borrowing costs, are driving consumer spending, helping Latin America’s largest economy rebound from the global financial crisis faster than was previously expected.

“The significant growth in family consumption shows the economy is out of recession and ready to expand,” Newton de Camargo Rosa, chief economist at Sul America Investimentos, said in a telephone interview. “Entrepreneurs are starting to realize demand growth is sustainable and will resume investment plans, which will also contribute to growth.”

On the political front, an improved economy in Brazil could help the ruling Worker’s Party continue in power. President Luiz Inacio Lula da Silva’s pick for president- chief of staff Dilma Rousseff- may receive a much needed boost in opinion polls months ahead of next year’s presidential election.

Image- Al Jazeera English
Online Sources- Al Jazeera English, Bloomberg, Xinhua, Reuters, Wall Street Journal,