In 2016, Brazil’s economy shrank by 3.6%, reflecting its worst annual performance since 1981. This followed a full year of recession in 2015 that hit the South American country’s economy hard. The economic crisis, coupled with the country’s political crisis, contributed to a sharp contraction of the Brazilian economy. Brazil saw a deterioration in its fiscal condition due to the combination of economic stagnation, growing inflation, political instability, public sector incompetency, and a widening budget deficit. Its economic situation had deteriorated to such a degree that credit rating agencies demoted the country’s sovereign debt to junk status in 2015 and 2016. Moreover, corruption and the political instability resulted in a significant drop in investor confidence and had a devastating effect on the Brazilian economy. Most investors felt insecure about investing in the country until evidence of its stability surfaced. The biggest challenges for Brazil at this time were identifying and eliminating fraud and corruption. Although these challenges were considerable, Brazilians remained optimistic, expecting the country’s economic situation to improve in 2018..

Economics Case Studies | Case Study in Management, Operations, Strategies, Business Environment, Case Studies

PayPal (9 USD)

BACKGROUND NOTE - Next Page>>