Evidence that the recession is truly global appears daily. Currently it is Brazil's turn to report depressing news. Yesterday, Brazil reported a 21.67% decline in exports in January after a 6.37% decline in December.Today Brazil reported that industrial production fell 12.4% in December after a 7.2% decline in November. Exports have been trending down since mid year with the sharp decline in commodity prices and are now 26.7% below January 2008. The decline in industrial production, which excludes price changes, has been less severe but it is now 14.45% below December 2007. The year to year percent changes in exports and industrial production are shown in the first chart.

Although data on employment in manufacturing and retail trade are not available for December or January, both series appear to have peaked in November as shown in the second chart.

In response to the decline in activity, COPOM, Brazil's Monetary Policy Committee relaxed its vigilance on inflation and reduced its target interest rate by 100 basis points to 12.75% on January 21, 2009. As a result of cautious monetary and fiscal policies over the past several years Brazil may be better able to weather the current downturn than it has been in confronting past downturns. Inflation has moderated, the fiscal balance improved, foreign debt reduced and foreign reserves at their all time high. These data can be found under Brazil in EMERGELA database.