Brazil Stimulus Seen Having Limited Effect

Brazil Stimulus Seen Having Limited Effect

Brazil Economy & Policy Corporate & Sovereign Strategy

The Brazilian government’s measures to stimulate auto sales, consumer loans, and capex are seen as having positive effects in the short term, but are unlikely to provide longer benefits, analysts say. With an eye on offsetting negative effects on growth, the government announced VAT exemptions averaging 6% reductions on auto sales, IOF reductions on consumer loans to 1.5% from 2.5%, and reserve requirement deductions earmarked for credit loans. Most measures are valid until mid-August. “The meas

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