All systems slow

摘要

During the month-long football World Cup, which concluded in Brazil on July 13 th, rua 25 de Marco, a tatty but popular shopping street in Sao Paulo, was a riot of yellow and green. It was hard to buy anything that did not come in the Brazilian national colours. Now the flags and football jerseys are gone; the cheap bags and Calvin Klein knock-offs are back. Katia Mauricio, who runs a stall full of t-shirts and headbands, is selling off the last of her World Cup-themed stock at a big discount. Business was good, she says. "But it will go downhill after the election." It is already heading that way. Business confidence has sunk to levels not seen since the depths of the global recession in 2009. Inflation among items whose prices are set by the market, not the government, stands at over 7%. Economists are busy slashing growth forecasts for 2014 to 1% or below. Analysts at Morgan Stanley see echoes of another 7-1, the scoreline when Brazil was drubbed by Germany in the World Cup semi-final. The more sensitive souls at Goldman Sachs warn of "stagflation".