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Brazil’s Burn And Crash

Brazil’s Burn And Crash

May 22, 2016 By admin

BY RSH Inc IN RSHinc On 22-05-2016

Brazil the host of the 2016 Olympics, an event which traditionally raises a countries yearly GDP isn’t looking so well right now; with concerns being raised about both its currency valuations and its GDP growth for the next 5 years.

The International Monetary Fund(IMF) currently estimates Brazil’s GDP for 2016 to be -3.8%, with a longer term projection of 2.0% for 2020. These growth values falling below optimal growth amounts of 4%+ for an emerging market, as a member of BRIC. Brazil has had an average growth of about 3.0% for the last 5 years, an insignificant growth compared to some of the other BRIC countries such as India whom has had consistent growth of 5.4% or higher for the last 5 years.

Brazil’s Currency by many was originally expected to grow in strength, with an estimated valuation of 3.56 of Q1 2016, and an estimated growth to that of 3.71 in Q1 of 2017. However, the current geopolitical issues in Brazil and it’s economic underpinning are counterintuitive to many conventional predictions with the current real value already dropping to that of 3.48 as of (05/20/2016).

Newer longer term expectations are that with the current issues ravaging Brazil such as the Zika Virus, Oil Prices, and the Petrobas Corruption Brazil’s currency will continue to fall, likely closer to original estimates of its 2020 value of ~2.4, thus making older conventional predictions suspect.

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