Brazil is going through a profound economic crisis. However, during the past few days the economy has fall into second place due to the extremely serious political crisis the country is going through, which includes corruption scandals closely linked to power.

Experts expect the Brazilian GDP to fall 3.45% in 2016. Should this occur, it will be the first time the country goes through two consecutive years of recession since 1930-1931, when the world was undergoing the Great Depression.

Brazil has been one of the countries with worst economic performance on a regional level in 2015 (right after Venezuela), as well as among the BRICS (which also includes Russia, India, China and South Africa).

The country’s amazing economic growth in the past decade, which reached 7.5% in 2010, was mostly based on the increase of households’ consumption, and is now speeding down, having a great social impact.

“The model is worn out”, said Luciano Rostagno, chief strategist at the Bank Mizuho do Brasil, to BBC World.

He stated that the unemployment rate used to be so high in Brazil, that the government implemented measures to promote consumption – such as increasing the minimum wage, tax exemptions and subsidies to purchase goods- and managed to stimulate the economic activity.

“The problem is that when the labour market started being in trouble due to low employment rates, inflation began to grow”, explained Rostagno. “And the government doubled the bet: it tried to control inflation by controlling prices, creating a huge tax problem.”

According to the analyst, the reduction of investments and the loss of the industry’s competitiveness due to the rise of production costs, led to the current situation.

It has been estimated that Brazil lost 1.5 million formal jobs last year. Furthermore, the impact is expected to be stronger this year, particularly for lower qualified positions.

The main international risk rating agencies removed the country’s degree of investment they had granted in the past decade.

Brazil’s gross public debt has kept on growing in relation to its GDP: it reached 66% in 2015 and it is expected to keep on growing.

Official data shows quarter after quarter of investment reductions. Considering only the past three months, there was a 4.9% setback in comparison to the previous quarter.

It is possible to think that the political crisis and corruption cases directly affects the economy, as the industrial confidence index has collapsed to its lowest level since 2001.

There is a confidence crisis among companies and business that halt investments and that has a direct relationship with employment. We are all hoping for good news to come to the largest Latin American economy.