Brazil: its economy fell 0.2% in July, worse than expected

WHAT HAPPENED

Brazil's economy fell 0.2% in July, worse than the 0.1% expected, after dropping 0.6% in June. Agriculture declined 1.2%, industry 0.4%, and services did not grow.

WHY IT MATTERS

Two months of decline suggest that high interest rates are already curbing credit and consumption. It is felt first in loans for cars and homes, stores, restaurants, industry, and agricultural businesses. Brazil is still growing 1.1% compared to a year ago, but is losing speed.

AND FOR YOUR PORTFOLIO

For a person in Brazil, this may mean fewer credit offers, more caution from banks, and businesses with fewer customers. For a long-term portfolio, the signal is that Brazilian companies may face slower sales and hiring, although the economy is not yet stopped.