Brazil: Current environment is an opportunity for reforms – Wells Fargo

By FXStreet FXStreet (Córdoba) – Eugenio J. Alemán, Senior Economist at Wells Fargo Bank analyses the current crisis in Brazil and it shows that it can represent an opportunity to introduce major structural reforms.

Key Quotes:

“The economic boom hid the need for major reforms and supported a temporary renaissance of sorts that has been cut short. However, as we have argued in the past, the current depreciation of the currency will go a long way to help Brazil come back from the current economic environment faster than what markets seem to be expecting.”

“We do not want to underplay the seriousness of the current economic and political crisis in Brazil (…) The country has already gone through an impeachment process and the end of that impeachment process saw the implementation of the Plan Real in 1994, which reintegrated the Brazilian economy into the global economy through the implementation of macroeconomic policies that allowed the country to de-couple from its past. Thus, although this process is going to be painful, it will help open the doors to continuing the path of reforms”

“Brazil has, once again, fallen from grace, as it has done so many times in the past. However, with the loss …read more

Source:: FX Street