Overblown Bubbles

Overblown Bubbles

Bonds Structured Finance Brazil Economy & Policy Corporate & Sovereign Strategy

by Vincent Bevins The debate over whether or not Brazil is suffering from a credit bubble has intensified over the last year amid dire warnings that the economy is heading for a drubbing if the problem is not addressed in time. But analysts within and outside Brazil contacted by LatinFinance say that such fears are largely overblown, or at least are best described in other ways. A credit contraction will have some negative fallout but the country is unlikely to see the dire scenarios envisioned by some doomsayers making comparisons with the US. Those warning about a credit bubble have focused on the argument that debt service burden in Brazil as a percentage of disposable income has

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