Last month in London, Mexico’s Olympic soccer team won gold by defeating its Brazilian counterpart, 2-1. The victory gave Mexico its first-ever trophy in a major international soccer tournament (apart from the 1999 Confederations Cup), and it proved that the soccer gap between Latin America’s two largest countries is shrinking, with Mexico catching up on the region’s traditional powerhouse. The Olympic final also became a metaphor for the recent performance of the Mexican and Brazilian economies.
After growing by 7.5 percent in 2010, Brazil ran into a series of headwinds last year, including a slowdown in China (its largest trading partner), a sharp rise in its national currency (which depressed exports), and a worsening of the European debt crisis. The country grew by 2.7 percent in 2011 and by a measly 0.1 percent in the first quarter of 2012. On August 31, the Brazilian government announced that second-quarter growth was only 0.4 percent, prompting Reuters to note that “Brazil may struggle to reach the market’s average expectations for 1.7 percent GDP growth for 2012.”
