Brazil’s Inflation Rises as Growth Forecast is Cut

Brazilian Central Bank President Alexandra Tombini (Image: Antônio Cruz/Abr CC BY 3.0)
Brazilian Central Bank President Alexandra Tombini (Image: Antônio Cruz/Abr CC BY 3.0)

Top Story — The Brazilian central bank issued a dismal economic forecast on Wednesday, predicting a contraction of the gross domestic product by 1.1 percent in 2015 and a nine percent inflation rate — the highest in more than a decade for the South American country. The forecast, if it comes to pass, would result in Brazil’s most significant recession in 25 years, at a time when the ruling Workers’ Party is in turmoil over its alleged involvement in a multi-billion dollar kickback scheme at partially state-owned oil giant Petrobras.

Central bank President Alexandre Tombini’s Wednesday announcement that the inflation rate would remain raised was in opposition to the bank’s prediction three months earlier that inflation would diminish to 7.9 percent by the end of the year. Tombini still maintains that the inflation rate will taper off to the targeted 4.5 percent in 2016.

The quarterly report published on Wednesday comes at a difficult time for President Dilma Rousseff, whose approval ratings currently stand at a record-low of 10 percent. Dozens of members of her Workers’ Party have been charged over their alleged role in the influence-peddling corruption scheme at Petrobras, which Rousseff chaired between 2003 and 2010. Even former President Luiz Inácio Lula da Silva distanced himself from Rousseff, his successor, when he criticized the current state of the Worker’s Party during a speech.

On Monday, the Brazilian president arrives in New York as part of a three-day visit to the United States to lure investment to her country. According to Reuters, however, it will be difficult for Rousseff to “convince Wall Street” that her weakened government is capable of pulling Brazil out of its stagnation and return to its former economic success.

Headlines from the Western Hemisphere

North America

  • The U.S. Embassy in Mexico reported the hijacking of a truck that was carrying a shipment of border crossing cards in northern Mexico.
  • Mexico has more investment projects under negotiation with Cuba than any other Latin American country, according to a Reuters interview with ProMexico, a Mexican government agency promoting foreign trade.

Caribbean

  • The Caribbean is experiencing its worst drought in five years according to an AP report, forcing countries in the region to adopt drastic water-conservation measures.
  • According to a Huffington Post report, 60,000 of the approximately 200,000 people made stateless by recent changes to citizenship rights in the Dominican Republic are children or teenagers, most of whom will be unable to enroll in school next semester due to lack of documentation.

Central America

  • Panama’s former dictator Manuel Noriega asked for forgiveness for military actions during his presidency that lead to the 1989 U.S. invasion of Panama, in an interview with television network Telemetro.

Andes

  • A Human Rights Watch report released Wednesday claims that top Colombian generals and colonels were aware of and may have furthered the widespread extrajudicial killings of civilians between 2002 and 2008, known as the “false positives” scandal.
  • Venezuelan authorities freed two student activists on Wednesday who had been in prison since last year’s anti-government demonstrations.

Southern Cone

  • Police in Brazil said Wednesday that they intercepted a note from Marcelo Odebrecht, the CEO of Brazil’s biggest construction company, asking his lawyer to destroy his email correspondence after he was arrested Friday on corruption charges.
  • Brazilian indigenous leader Ademir Kaba Manduruku accused his country’s government of violating both international law and its own constitution by moving forward with the construction of the controversial Belo Monte dam, when he spoke at the 29th United Nations Human Rights Council in Geneva.

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