Updated 10:57 PM EST, Mon, Nov 23, 2020

Brazil's Economy Shrinks Even Further in the Third Quarter

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The numbers aren't looking good for Brazil, as the country's economy continues to sink during the third quarter of the year. Brazil's economy has fallen by 1.7% in the third quarter of 2015, compared to its second quarter's numbers. This is the worst recession the country has seen in 25 years.

In a report with BBC, the country's economy has shrunk by 4.5%. President Dilma Rousseff has tried to combat the country's economic woes by cutting back on government spending and raising taxes.

The unpopular President is currently embroiled in a massive corruption scandal. The huge drop in economic activity was mostly due to a drop in foreign investment, which has fallen to as much as 15% compared to a year ago. That country's economy has been falling for nine consecutive quarters now.

Brazil's economy has drastically been affected by the slowdown in commodities such as oil, iron and copper. The country's currency, the real, is already the worst performing currency. It is reportedly down to 31% against the dollar as of this writing. Inflation in the country has risen by over 10 percent, which is the highest it has been in the past 12 years. The rate of unemployment has increased as well, to over 8.9 %, from 6.8% just a year ago, CNN reports.

Brazil's is also experiencing a major corruption scandal at the government-run oil company, Petrobras. About a year ago, investigators found proof of a massive bribery scandal between contractors and Petrobras officials, which included major government leaders.

While investors have already been spending less in Brazil before the scandal broke out, the Petrobras corruption scandal was enough to send all investors out of the country.

The Brazilian authorities have arrested one of the country's highest-ranking senators, Delcidio Amaral, and the CEO of BTG Pactual, Brazil's largest independent investment bank, Andre Esteves, for allegedly trying to disrupt the corruption scandal investigation. Estves has since then resigned from his post as CEO of the bank. 

While many economic analysts bemoan the country's fate, Brazil's worst problems are said to be mostly self-inflicted.

"Almost nobody believes in Brazil right now," says Brian Winter, vice president at Council of the Americas. 

Even household spending has fallen to 4.5% as of last quarter. Many Brazilians are holding on to their wallets as the country's economy continues to grow dim. 

Chris Probyn, Chief Economist at State Street Global Advisors, said that Brazil is in "political paralysis." Many Brazilians have called for the impeachment of Rousseff, who has fallen in the approval ratings as of late. The president has so far, defiantly resisted those calls.

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