If you thought the economy was bad in Canada, you should see what’s happening in Brazil – FINANCIAL NEWS-ecozik.com
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If you thought the economy was bad in Canada, you should see what’s happening in Brazil

he Christ the Redeemer statue stands on top of Corcovado Mountain in this aerial photograph of Rio de Janeiro, Brazil. The country's economy shrank by nearly 3 per cent last year.

No doubt about it, Canadian investors have a lot to complain about. The marketplace is on a roller-coaster, pulled by doing this which by forces beyond our borders. The S&P/TSX composite was down more than eight percent by mid-January as benchmark oil prices dipped below US$30 a barrel and China continued to swoon. It recovered on speculation Russia and the Organization of Petroleum Exporting Countries would accept production cuts. Now the recovery proved short-lived, as oil prices once more dipped below $30. And so on.

Meanwhile, the Canbuck may be worth less against the greenback than anytime since 2002. Bank of Canada Governor Stephen Poloz says we need to get accustomed to inflation.

Closer to our pocketbooks than our portfolios, we’re already paying more for cauliflower and meat and oranges. Heck, a lot of us can’t even manage to escape from everything in Vegas or Miami, since we’re paying a 40 per cent premium on everything stateside.

Canada’s economy is a zombie, our stock markets basket cases – right?

Well, it depends how your perception. You have to maintain perspective (at least that is what they are saying). So when you do that, one thing becomes clear: maybe it’s a lot worse.

Like, say, should you lived in Brazil.

The comparison is not altogether out of left field, though there are obvious differences between Canada and the place in which the nuts originate from. Brazil is home to 200 million people. It’s an emerging economy. They’ve jungles there, for screaming loud. Plus they speak Portuguese, largely.

Yet there are some similarities. GDP both in countries hovers around US$2 trillion (Canada slightly below, Brazil slightly above). Moreover, Brazil is subject to the fluctuations of global markets, since it is hugely reliant on the export of commodities like oil, iron, meat and grain.

Like Canada, Brazil’s economy, currency and stock market have been hit hard by the double whammy of decimated oil prices and China’s economic slowdown.

Yet as much as we complain, the harm Canada has sustained from all of these twin factors is similar to Brazil’s in kind, but not in degree. Not with a long shot.

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