Synthesis of the Brazilian Economy

BRAZIL ECONOMICS - Report 01 Feb 2016 by Affonso Pastore, Cristina Pinotti, Marcelo Gazzano and Caio Carbone

The country continues to suffer the effects of the worst recession in the past 30 years. The impossibility of putting the economy on a growth path without adopting reforms that reduce the upward trend of government spending and interrupt the unsustainable rise of the public debt, combined with the high political costs of unemployment (which will reach two digits in the next few months) and the high inflation, will increase the populist bias of economic policy. With the goal of gaining some support, the new finance minister’s rhetoric has been similar to that of his predecessor. The result will be stagnation of the economy and worsening of the fiscal picture until a new combination of political forces can push through the necessary reforms.

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