European crisis, less demand from China drag down Brazil's GDP

Story highlights

  • Brazil's economy picked up slightly in the fourth quarter
  • The president has hiked the minimum wage in an effort to boost growth
  • Foreign capital has raised the value of the real
Brazil's economy grew a sluggish 2.7% in 2011, the government statistics agency IBGE reported Tuesday, far below its target of 4.5%.
That compares to 7.5% growth in 2010. Latin America's largest economy was dragged down by a crisis in Europe, waning demand from its main trade partner China and a slowdown in its own domestic consumption.
Nonetheless, the GDP picked up in the fourth quarter after contracting slightly in the third, in a sign that 2012 could see some recovery.
The GDP grew 1.4% in the fourth quarter, compared to the year-earlier period and 0.3% compared to the previous quarter.
The IBGE also revised its third quarter GDP data to show a 0.1% contraction from the previous quarter.
President Dilma Rousseff and her economic team have implemented a series of measures aimed at boosting economic growth, including easing taxes and raising the minimum wage.
Brazil has also tried to limit an influx of foreign capital, which has forced the real currency to new highs, making the country's manufacturers less competitive.