Although it remains the world's seventh largest economy, last year the nation of Brazil very narrowly avoided experiencing an economic contraction, or a decline in gross domestic product, as it had a growth rate of a mere 0.1 percent.

This latest economic performance is a blow to President Dilma Rousseff’s administration, which is currently trying to regain credibility with markets and pass an austerity program through Congress.

As reported by BBC, the Brazilian economy, which had been expanding at a fast pace for the past decade, has considerably slowed down in the past four years.

The economic slowdown is a direct result of low commodity prices combined with a sluggish global growth as well as low investor confidence.

Under the guidance of Joaquim Levy, the Latin American country’s new finance minister, Brazil has moved from a state of stimulus to one of austerity.

The Brazilian government had been striving to stimulate the economy from 2011 to 2014 by offering labor tax breaks, as well as subsidizing petrol and lowering the price of electricity.

In an effort to balance government finances, Levy had reined in government spending while at the same time raising taxes.

As a result of these measures economic analysts say that 2015 is likely to be a difficult year for Brazil.

Brazil’s statistics agency announced that the Gross Domestic Product shrank 0.2 percents in the fourth quarter of 2014 compared to the same period a year before.

The statistics agency actually modified the way it calculates GDP starting in the fourth quarter; it now included activities such as investment in research and development.

As reported in the Wall Street Journal many economists actually feared the figures for 2014 would have been worse.

“Nothing really changed in terms of the structural weakness of Brazil’s economy,” said Alfredo Coutiño, Moody’s Analytics senior economist.

“The only thing that we’re seeing is that some of the statistics switched to the positive side.”