Amid political crisis, Brazil economy faces painful downturn

Brazil, an exporter of commodities like sugar, coffee and iron ore, has been rocked by a steep drop in the price of raw materials, partly the result of weakening demand as the Chinese economy decelerates.

During the good times of the mid-2000s, Brazilian consumers borrowed heavily, celebrating their arrival in the middle class by buying cars, refrigerators and iPhones.

A corruption scandal surrounding the state-run oil company Petrobras has paralyzed businesses that had connections with the energy giant.

"The financial markets are optimistic with the possibility of the president's impeachment," said Alessandra Ribeiro an economist at Tendencias, a Sao Paulo-based consultancy.

The expected changes in the government and its economic policies could represent the beginning of a gradual return of investor confidence in Brazil.

The nation's currency, the real, rallied in advance of the impeachment but retreated a bit against the U.S. dollar after the Senate vote.