Brazil is in the throes of an economic crisis with inflation halting the economy

The Brazilian economy was technically replaced by a third phase when rising inflation hampered the recurrence of the plague.

A third data released Thursday showed a 0.1% decline in domestic sales from the previous quarter, while it declined by 0.4%. Compared to the third quarter of last year, the economy has grown by 4 percent.

The decline was mainly due to the 8 per cent agricultural decline, which was affected by an unprecedented drought, and a 9.8% reduction in exports and exports. The industry continued, with jobs growing by 1.1 percent.

“The economy is in shambles. We have reached a pre-Covid level, but since then there has been no growth at all and there is no sign of growth, “said Mauricio Molon, an economist at Logus Capital in São Paulo.

The largest economy in Latin America has grown rapidly since the launch of Covid-19, when GDP for the first quarter of this year returned to where the epidemic began in late 2019.

Since then, however, recovery has deteriorated, and economists predict that next year will be a shorter one. The Presidential election in October also threatens to bring uncertainty.

Paulo Guedes, Brazil’s finance minister, remained steadfast, to say The Financial Times recently reported that Brazil would “surprise the world again” and continue its “V-shaped recovery”.

However, many are skeptical of what the ministry has predicted by more than 5 percent growth this year and more than 2 percent next year. Many economists expect Brazil to end this year and grow by 4.8 percent with respite or slight growth next year. Credit Suisse and Itaú Unibanco, Brazil’s largest lender, predict a 0.5 percent decline next year.

“Covid is not our biggest problem. Our biggest problem now is inflation. It comes from the village due to currency uncertainty and financial uncertainty, but we are also importing inflation,” said Fernando Genta, an economist at XP Asset Management.

The Central Bank of Brazil in October announced its sharp rise in interest rates for nearly 20 years in a bid to test it reduce inflation, which has reached about 11 percent, is reducing its income and increasing dissatisfaction.

By the end of the year, Selic’s rate is expected to reach 9.25 percent, up from 7.75 percent at present and 2 percent earlier this year. Efforts by the central bank to change prices, however, could affect next year’s growth by reducing economic activity.

Molon said the economy is likely to recover in 2022 due to two challenges to tightening monetary policy and a lack of confidence between consumers and businesses.

“We do not have the same desire for goods, money is reduced by rising prices, and the labor market is still weak,” he said.

This misconception has come to the fore in the wake of uncertainties about next year’s presidential election. Even all those in the front are well known, even Jair Bolsonaro, the right-wing president, or Luiz Inácio Lula da Silva, the former left president, is unpopular with Brazilian businesses.

Many expect Bolsonaro to stop raising funds and give money to the poorest in Brazil to win votes. Lula’s financial plans are unknown, although he spoke out against the establishment of state-owned enterprises and government spending, which are considered to be the most important economic activity.