Brazil is likely to suffer nearly a lost decade of economic development with living standards not returning to pre-crisis levels until around 2022, economists said on Friday. Brazil’s slow recovery from its worst-ever recession means it will be another five years until per-capita gross domestic product – a measure of a country’s living standards – returns to where it stood in 2013 before the crisis hit, said economist Bruno Lavieri.
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“It’s almost a lost decade,” said Lavieri of consultancy firm 4E. Latin America’s largest economy probably contracted more than 3 percent for a second straight year in 2016, according to a Reuters poll on expectations for official growth figures due out on March 7.
Prospects of a lost decade raise the stakes for President Michel Temer and his ambitious agenda of economic reforms, seen by many analysts as the only way for Brazil to boost productivity and grow at a sustainable rate in the future.
The economy is expected to resume growth this year at a slow pace of around 0.5 percent after being pummeled by weak commodities prices and political fallout from the graft scandal at state oil firm Petrobras.
Since the recession began in 2014, GDP per capita has fallen 9.6 percent, said Julio Mereb, an economist with think tank Getulio Vargas Foundation. Economists like Alessandra Ribeiro, a partner with consultancy firm Tendencias, do not expect the indicator to return to its record 2013 level of 30,800 reais ($9,903) until 2023.
Office clerk Andréia Zanetti, 34, is among Brazilians who have felt a dramatic fall in income. She spent seven months looking for a job and agreed to earn about half of what she used to before unemployment. “I had to change shopping habits, stopped having lunch and dinner out and canceled my landline phone,” she told Reuters. “I’ve even switched my son’s milk to a cheaper brand.” ($1 = 3.1100 reais)