Los Angeles, CA – There’s a serious fissure developing in the BRIC wall as the latest government figures show that Brazil has slipped into recession, with the Latin American giant’s gross domestic product (GDP) contracting for a second consecutive quarter.
According to the official government statistics bureau in Brasilia, the country’s GDP stands at about $567 billion, down 0.6 percent from the previous three months, while revised figures for the first quarter showed a drop of 0.2 percent.
The government had initially had reported first-quarter growth of 0.2 percent.
The country last experienced a recession in late 2008 and early 2 009, when a world economic crisis slashed demand for steel, minerals, farm goods and other key Brazilian exports.
The BRICS – Brazil, Russia, India, China and South Africa – together represent 18 percent of the world total, are all experiencing slowdowns in their once fast-paced rates of growth. Exacerbating the economic difficulties is Russia’s volatile activity in Ukraine, which has sparked a rash of sanctions on Moscow by the US and the European Union.
Last month, leaders of the five countries met in Brazil and decided to create their own development bank as a counterweight to what they perceive are “western-dominated financial organizations like the US-based World Bank and International Monetary Fund.
The new development bank will reportedly be based in Shanghai and is expected to be functional within two years. It will be capitalized at $50 billion, a figure that could grow to $100 billion to fund infrastructure projects. The fund would also have $100 billion at its disposal “to weather economic hard times.”