Once again, it’s crunch time for
BRAZIL MACRO: Time to act
It will take more than rhetoric for Brazil to regain credibility in global markets. A new fiscal plan might be part of the solution, but investors are likely to demand a lot more. By Thierry Ogier
Officials from Latin America’s biggest economy
have, in recent months, embarked on yet another frenetic round
of marketing, this time in a bid to convince the world that
Brazil does not deserve to be ranked among the countries most
vulnerable to rising US interest rates – the Fragile
Five, as Morgan Stanley dubbed Brazil, India, Indonesia, South
Africa and Turkey in a report last summer.
But it’s a message that not everyone is buying:
at a congressional hearing in February, US Federal Reserve
chairwoman Janet Yellen referred explicitly to Brazil as among
the emerging markets most vulnerable to a reversal in capital
President Dilma Rousseff and her team are likely to need
more than words in trying to convince markets that their claims
about Brazil’s economic health and prospects hold
water. The finance ministry has already been spurred...
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