Biggest Decline since 2009 Registered by the Brazilian Industrial Output

Published Date : Feb 04, 2015

When Brazilian industrial output closed for the last quarter of 2014, it registered the biggest slump since the country was impacted by global financial crisis in 2009. The global economic downturn has adverse effect on Brazilian economy. Not only did it hamper the economic growth of the country, the recession also gave a serious blow to the confidence of the regional businesses. This led to a sharp fall in national output of the country. 

It took some time for Brazil to recover from the aftermath of global economic crisis, but with the slow growth rate registered by the country on 2014, policymakers will have to start focusing on driving economic development yet again. 

According to IBGE, the statistic agency, factories and mines outputs in Brazil fell by 3.2% in 2014, which was worse than the 3% drop registered by the sector in 2013. The trend was followed by other important segments of the economy as well. 

As reported by IBGE, the capital goods production recorded a slump of 9.6 percent during the last quarter of 2014, while the durable goods production sector closed after registering a drop of 9.2 percent. Both these sectors are very crucial for the economic concerns of Brazil, since they cater to business prospects and consumer confidence respectively. 

Such startling drop in overall production recorded by Brazil’s economy raised serious concerns for the country’s growth prospects. Following the slow growth rate of its economy, Brazil is now also faced with the problem of steep plunge in consumer confidence. Industrial confidence on the other hand, remained at historic lows. 

According to reports by IBGE, the industrial production of the country fell by 2.8% in December 2014. This surpassed the agency’s estimates of 2.5 percent decline. The rate of production also fell in 17 out of 24 industrial units of the country. It is important to note here that the slump in equipment manufacturing emerged as the major cause to this decline.