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The Olympics Have Caused A Brazilian Recession

Wednesday, 21 September 2016 10:53 by Shane P

The fireworks have stopped, the green pool has been covered and the last race has been run. The Rio 2016 put on a grand spectacle enjoyed across the globe, but now, even with the ongoing Paralympics, Brazil has been forced to snap back into reality. They are now in the midst of an economic crisis that has plunged them into recession.

Brazil is a country that has found itself in the middle of both economic and political crisis, due to President Dilma Rousseff’s impeachment trial. Following the expenditure of the Olympics, Brazil faces an uphill battle to resurrect its stumbling economy- with the Olympic Games itself providing almost nothing in the way of a boost. Their tourism industry has actually shrunk this year, with visitor numbers dropping by 1.65% when compared to last year’s figures.

Despite the Brazilian government’s extravagant promise that the Olympics would provide an enormous economic boost, the country now finds itself in a position where it’s in a recession worse than any other in the last 100 years. Brazil’s unemployment rate is now running into double digits, after being just 6% after it had hosted the FIFA World Cup in 2014.

Brazil is facing a deep recession, with the economy remaining depressed for the remainder of the year. GDP is expected to be running at -3.0%, in comparison to the -3.8% of 2015. Annual inflation is nearly double the target set by Brazil’s Central Bank of 4.5%, and this is making it more difficult for Brazil to cut its interest rates- meaning that they have been unable to revive the economy.

The Brazilian recession is well into its third year, and the total bill for the Olympic Games remains uncertain. However, experts are estimating the figure to be something around $13billion USD. In addition to this whopping figure, the Brazilian government also authorised an $850 million loan for Rio to help pay for the Olympic security and infrastructure.

Brazil’s economy doesn’t appear to be recovering any time soon, and if you are looking to outsource your international debt recovery to a reliable and reputable company, then contact Octempo today for more information on the services we provide.

 

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Debt recovery post-Brexit

Thursday, 8 September 2016 15:43 by Shane P

Debt recovery post-Brexit

We may not have started withdrawing from the EU just yet, but once the deed is done, how will this effect debt recovery?

It stands to reason that all debts that have origins in the UK will see no changes in the way they are collected. But what about those that originate in the EU?

Debts that someone may have in the EU should subsequently fall into the same category of debt collection in non-EU countries such as Australia or the US.  You can include these kinds of debts within a UK bankruptcy but can only gain protection from them within the UK.


But what happens when you have a UK debt and move to another EU country?


Currently, the European Payment Order allows debts to be enforced and collected across borders. This means if you have a UK debt and you decide to go and live in another European country, the debt can still be recovered.

This is because we are still a member of the EU, and so the current laws will continue to be enforced. It still remains unclear as to whether this policy will change, or indeed even be addressed, in the near future. It is unlikely that Brexit will affect judgments enforcement in the UK, however this is an entirely different story when it comes to judgment enforcement away from our own borders.


Our Views


So far, it doesn’t seem as though Brexit has caused a negative effect on lender behaviour- at least, there is no visible sign of a detrimental outcome. Apart from the generic uncertainty and anxiety surrounding the consequences of Brexit, there also hasn’t been an adverse effect on banking relationships. However, as we begin the long process of leaving the EU, we will need to keep a close eye on how lenders responses and debt trading patterns change towards UK borrowers.

If you are looking to outsource your international credit control to a reliable company within these uncertain times, then you can contact our dedicated team to learn more about the wide variety of services that Octempo are able to provide.

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