Real Shocks in Brazil

Real Shocks in Brazil

Real Shocks in Brazil

Moneybox
A blog about business and economics.
June 2 2012 11:36 AM

Real Shocks in Brazil

Real business cycle approaches continue to be important when dealing with countries with large agricultural sectors:

Gross domestic product in Brazil expanded just 0.2 per cent in the three months to the end of March compared with the previous quarter, and 0.8 per cent year, forcing economists to review their forecasts. A Reuters survey of economists had predicted a 0.5 per cent expansion.
Unusually though, the villain in this quarter was not the country’s faltering industrial sector but its mighty agricultural industry, whose crops fell prey to erratic weather in several parts of the country.
“In the first quarter, we felt the result of seasonal processes which led to a [partial] failure of the soybean crop and then a fall in the rice and tobacco crop,” said finance minister Guido Mantega.

What with all the other problems in the world economy, this is the kind of bad luck we don't need.