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Jul 03 2012

Brazil's Path to Growth

ECRI has just updated its Brazilian Long Leading Index (BRLLI). The value of this index lies in its ability to anticipate cyclical turns in the economy before conventional leading indexes.

With Brazil’s economy having slowed dramatically from its 7.5% rate of growth in 2010, policymakers have been cutting rates and enacting stimulus since last year in an attempt to boost growth. In April, the government announced a 65 billion-real stimulus package, and the central bank recently indicated that they will cut rates below the current record low after having already slashed 400 basis points since August.

ECRI’s latest update to the BRLLI provides insight into whether the current weakness in the economy is likely to worsen, or if the aggressive actions of the Brazilian central bank and government have the economy primed for growth.

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The Yo-Yo Years

ECRI March 1, 2012

The convergence of two cyclical patterns virtually dictates an era of more frequent recessions in developed economies. As a result, and because of the Bullwhip Effect, growth in developing economies is going to be jerked around more than people think, making for a good deal of cyclical economic contagion. In other words, we are now in the yo-yo years.


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