The Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth

Brazil Outlook Economy, the Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth.

(Source Economist Intelligence Unit) A severe economic slowdown in 2009 and rising unemployment as a result of recession in the developed world will make it much more difficult for the ruling leftist Partido dos Trabalhadores (PT) to secure a third term in the October 2010 presidential election.
The Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth in the first half of the outlook period. Growth is forecast to decelerate from an estimated 5.3% in 2008 to 1.6% in 2009, before it recovers only modestly to 3.2% in 2010. The 4.1% average annual growth projected for 2011-13 is significantly weaker than the 4.5% average of 2004-08. We anticipate higher inflation (eroding real disposable incomes) and severe credit rationing in 2009, which will weigh on private consumption and investment. We assume that policy continuity will facilitate a modest recovery from 2010 onward, in tandem with trends in the global economy. Brazil's reduced external vulnerability should help the domestic economy to cope with the global economic downturn. However, we expect a weaker exchange rate in 2009-13. The current account will slip into deficit in 2008 and remain in the red in the rest of the forecast period.