Brazil eases again

Brazil's central bank, the Banco Central do Brasil cut the discount rate again.  It has a pretty good correlation with economic growth,  with falling rates leading recoveries in economic activity by on average six months.  In the chart, the bank rate is plotted with an inverted scale, and gives a clear indication of the possible rise in economic activity.  There are complications (aren't there always?), like a big rise in debt to GDP, plus global weakness which has impacted Brazil's exports.  All the same, it seems very likely that the economy will start an upturn soon.

Brazil is about 3% of the world's economy.  This means that 17% (including China) is poised to resume growth.   Unfortunately, since the Euro-zone (the currency area which uses the Euro) is also 17% of the world economy, the one offsets the other.  So we turn back to the US, roughly 20% of the world economy.  And the question remains: is "payback" over?  We'll be getting data soon which will help clarify the picture.  But something has changed: whereas before Brazil and China were dragging with Europe, now they'll be accelerating.  And that is an improvement.