Showing posts with label Reforms. Show all posts
Showing posts with label Reforms. Show all posts

Thursday, October 9, 2014

Brazil: Why It Fails to Deliver on Potential

Looking beyond politics
Politics continue to dominate market sentiment. Doubts about the capacity to sustain the current economic model in coming years and a highly unpredictable Presidential election have fuelled recent market swings. But would a confidence shock alone be sufficient to raise Brazil's growth trend? We don't think so.

Why Brazil fails to deliver on potential
A rebound in sentiment could lead to a better growth outlook in the short term but would likely be insufficient to boost Brazil's medium to long-term growth trend. This is because a large part of Brazil's slowdown has clear structural roots, in our view.