The IMF predicts Brazil’s economy will contract 1% this year due to “stubbornly weak” private sector sentiment, corruption charges and efforts to diminish public spending and inflation, compared to expectations for a 0.3% growth at the start of the year.
The Fund also cut its earlier projections for an even deeper contraction in Russia, with output expected to diminish 3.8%, as volatility in the oil markets persist.
Meanwhile, China, the world’s second-largest economy, is slowing as “previous excesses in real estate, credit and investment continue to unwind,” according to the IMF. Nevertheless, Chinese stocks surprised investors this after the recent surge in prices. For instance, the iShares China Large-Cap ETF (NYSEArca: FXI) jumped 23.7% over the past month. [China ETFs Soar, but U.S. Investors Miss Out]
For more information on developing economies, visit our emerging markets category.
Max Chen contributed to this article.