New Expansion of Credit from Public Banks?

BRAZIL ECONOMICS - Report 24 Aug 2015 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

The depth of the recession is causing increasing alarm by the government, which has started to react. After reducing the fiscal effort promised for 2015 and coming years, it announced that public banks – Banco do Brasil and Caixa Econômica Federal – will expand the supply of credit to certain sectors of the economy. The administration’s main concern at the moment is the automotive sector, where the risk of large layoffs is rising. Is the government reviving the interventionism that characterized Dilma Rousseff’s first term?

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