Brazil slowdown

The chart below shows the year-on-year change in Brazilian IP (industrial production) on the left hand scale compared with the level of interest rates (on the right) as represented by the central bank discount rate ('SELIC').  The interest rates are plotted inverted, because as interest rates rise, the economy slows, as they fall, it sets up the economy for recovery.  Interest rates have been rising for nearly a year now, and IP has started to fall.  But interest rates lead the real economy.  Even if rates stop rising now, the economy will keep on slowing for at least another six months.  And by the looks of it, I'd say Brazil is headed for quite a deep recession if rates go on rising.