Rio's revelers are scaling back on spending ahead of carnival time. As Sonia Legg reports, Brazil is currently mired in an ever deepening recession.
It's the carnival capital of the world - only this year Rio won't be partying quite as hard as normal. A second year of deep recession is on the cards in Brazil. And spending is down - even on the country's most famous event. Olga Valles runs Condal, one of the city's largest producers of carnival masks. (SOUNDBITE) (Portuguese) FACTORY OWNER, OLGA VALLES, SAYING: "We are making 30 percent less than we were last year, which was not a great year in itself - 30 percent is a lot for us. Some shops, clients of ours for a long time, have been forced to close." Brazil's national research institute says the economy is experiencing its worst sequence of events for more than century. Inflation is running at 10 percent and unemployment it rising. Brazil's reliance on iron ore and its exposure to China part of the cause. Justin Urquhart Stewart is from Seven Investment Management. (SOUNDBITE) (English) SEVEN INVESTMENT MANAGEMENT, PARTNER, JUSTIN URQUHART STEWART, SAYING: "From being one of the fated BRIC countries, to now being in a position where it is suffering so much because of the commodity prices it has to ride the cycle of the commodity price." Brazil's currency, the real, also fell by nearly a third against the dollar last year. That's kept Brazilians at home and attracted more tourists. It's also means fewer foreign products are being imported - helping local manufacturers. With the Olympics taking place in Rio this year that be could be a bonus.