Brazil: is the carnival over?

Not long ago, Brazil was an emerging-market favourite. But last year, its Bovespa index was one of the world’s worst performers.

Not long ago, Brazil was an emerging-market favourite. But last year, its Bovespa index was one of the world's worst performers. Economic growth, which surged by 7.5% in 2010, is expected to reach just 1.5% for 2012. And this isn't simply a cyclical dip. Many analysts now reckon that the economy's natural speed limit the pace it can grow at without inflation taking off has fallen to 3.5%, notes Bob Davis in The Wall Street Journal.

The problem is that "the motors of growth... in the past decade are sputtering", says The Economist. One motor was rising commodity prices and, hence, exports. China's slowdown and weak recovery, along with a softer global economy, has clouded the outlook.

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