Economic Slowdown Could Be End of Smooth Ride for Brazil’s Rousseff

Economic Slowdown Could Be End of Smooth Ride for Brazil’s Rousseff

Brazilian President Dilma Rousseff has enjoyed a smooth ride since her inauguration in January 2011. Despite a series of corruption scandals that led to the resignation of seven of her cabinet members, she has suffered no real political damage after 18 months in office. But a flagging economy and a related crisis roiling small and medium-sized Brazilian banks could pose the greatest threat yet to her leadership.

Rousseff’s Worker’s Party isn’t accustomed to operating under the politically corrosive effects of protracted economic troubles. Brazil’s economy, Latin America’s largest, has thrived under the party’s stewardship, recovering quickly from the financial crisis that saw growth drop to negative 0.3 percent in 2009. In fact, since the 2002 inauguration of Rousseff’s predecessor, President Luiz Inácio “Lula” da Silva, economic growth has averaged 4.1 percent annually.

That resilience may be tapering off. Analysts are projecting poor growth for 2012 -- close to last year’s tepid 2.7 percent or even lower.

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