The Strategist

Traditional Brazilian Carnivals To Be Cancelled Because of Crisis

01/12/2016 - 15:20

Brazilian cities began to abandon the annual carnivals because of the crisis. The worst since the 1930's economic situation is noted now in the country. The five-day celebrations, which are traditionally held in February, were not canceled even during the 2008 crisis.

Alan Betensley
Alan Betensley
Campinas city with a population of 3 million people has already refused the festivities. Gabriel Rapassi, head of the city’s Department of Culture said that the local government will not allow a celebration worth 1.3 million Brazilian reais ($ 322 thousand).

For the first time in more than 30 years, the festival was canceled in Porto Ferreira. The mayor noted that savings of 120 th. Brazilian reais ($ 29.6 th.) will be spent on purchase of a new ambulance.

Carnivals will be missed in Macapa and Lavras do Sul in the south. It is expected that in the coming two weeks, the decision will be taken by other cities. According to FT, most likely, there will be informal street festivals, but in general, the celebrations will be less ambitious.

In 2015, Brazil's economy shrank by 3.7%, according to a survey of the country’s Central Bank. Economists participating predicted a drop of 2.9% in 2016.

Last year and a half, Brazil was shaking with a scandal. It broke out with the investigation of corruption in the largest Latin American companiy - state-controlled oil concern Petrobras. As investigators believe, the company has received at least $ 3.8 billion from illicit payoffs, bribery and money laundering operations. The money then were partially distributed among members of the government, parliamentarians and party bosses to provide political cover for criminal schemes.

The political crisis has coincided with a landslide reduction of basic commodities prices. They account for 60% in structure of exports (14% of GDP). Already in 2014, the country has recorded a trade deficit. This led to a decrease in the country's key economic indicators. At the end of the third quarter of 2015,  country's GDP decreased by 1.7%, or 4.5% year on year. Growth in consumer prices in December rose to 9.9% from September's 9.5% - the highest rate in 12 years. Key Brazilian Ibovespa stock index has lost almost 7% for the year, but in the five years fell by 33.3%. In September, S&P stripped the country's investment rating.