Brazil: We are still forecasting a steep recession this year – Wells Fargo
By FXStreet According to analysts from Wells Fargo, economic growth in Brazil will remain elusive if economic growth depends on the stance of the global economy and/or expansionary monetary and fiscal policy, even if there is some improvement in the current political environment.
Key Quotes:
“Perhaps one of the most difficult issues for Brazil today is how to reduce the fiscal deficit under this highly unworkable political environment.”
“Brazil’s domestic economy is in shambles, but is the global economy coming to the rescue? Do not count on it. It is true that the depreciation of the Brazilian currency has given some competitive edge back to Brazilian producers. However, for the global economy to make a difference, it has to be in a much better shape than it is today.”
“There are some potential positive developments that will probably help, on the margin, the Brazilian economy during this year and next. However, we are still forecasting a steep recession this year and a very weak recovery afterwards.”
“One of these potential “green shoots” is the improving situation in Argentina, one of Brazil’s largest export markets. Our expectation is for Argentina to start performing better this year and improve further next year.”
“Furthermore, while the global economy is not …read more
Source:: FX Street
