Growth is down in Latin America’s largest economy and nervous, shell shocked Brazilians are crossing their fingers that their economy isn’t still stuck in its historic trap of commodity-dependence and high inflation.Brazil, which grew 2.7 percent last year, isn’t the only emerging economy to slow down in the wake of decelerating growth across the developed economies: China lowered its growth target to its lowest in a decade, and India’s GDP is also quickly slipping. But Brazil’s long history of booms and busts, of bursts of economic dynamism which never quite manage to catapult the country to the front ranks, makes this slowdown more worrisome.Brazilians are largely blaming the meltdown on Europe. Guido Mantega, the country’s finance minister, said, “if the global crisis hadn’t worsened in the second quarter, our growth [for 2011] would have been closer to 4 per cent.” Europe’s recession has hammered Brazil’s export sector and diminished the investment flowing into the country, while policy-makers in the US and in Europe have followed radical monetary policies that have the effect of weakening the dollar and the euro against the currency of commodity exporting countries like Brazil. The high value of the Brazilian real makes Brazilian manufactured goods less competitive in export markets — and also at home.The past still haunts Brazil. The country suffered countless booms and busts through the 19th and 20th centuries and was the poster child of hyperinflation in the 1980s and 1990s. The country finally began to sustain growth after the Plano Real was introduced in the mid-’90s, and the future finally seemed set to arrive after the financial crisis, when Brazil recovered at lightning speed.Brazilians worry about a return to their days of weak or negative growth. President Dilma Rousseff has long advocated lowering the country’s interest rate to stimulate lending and infrastructure development. But there is fear that lowering interest rates too fast without cuts to government spending will cause a blowup in inflation. In the middle to long term, only unpopular structural reforms can keep inflation at bay.Brazil’s greatest fear is to be trapped between two choices: for slow growth or high inflation. This is what worries Dilma, as everyone in Brazil calls President Roussef; unfortunately, the only way to avoid the trap may be to make exactly the kind of policy choices (spending cuts, labor market deregulation, privatization) that Dilma’s electoral base doesn’t like.Much depends on what Dilma does next. Via Meadia will be watching.