Country Risk Service Brazil
The Economist Intelligence Unit, April 2013, Pages: 25
The president, Dilma Rousseff, has launched her bid for re-election in October 2014, opening up the field for rivals for early campaigning. She remains favourite to win, but if unemployment rises her high popularity could ebb. Ms Rousseff's success in implementing her legislative agenda has been mixed so far, and it is unlikely that she will seek to push through structural reforms, for which there is little political appetite, as she gears up for the 2014 election. After a protracted slowdown, GDP growth is forecast to pick up to 3.2% in 2013, assuming a recovery in investment and a better global economy.
The 2014 elections and World Cup will boost growth, but, more generally, economic expansion will hinge more on productivity gains than in the past, as the contribution from credit growth and labour force dynamics weaken. The Central Bank will try to ride out the resurgence in inflation without lifting the SELIC policy rate from 7.25% currently, but should the inflation rate fail to decelerate, it may be forced to tighten by around 75 basis points by year-end. Structural factors and sticky services price inflation will keep inflation above the Central Bank's central target of 4.5% for most of the forecast period. The current-account deficit will average 3.3% of GDP in 2013-17, as import growth exceeds that of exports. Foreign capital inflows will finance the deficit.
With Ms Rousseff launching her re-election bid at an early stage, this has opened the field for a number of rivals to begin campaigning.
Country Risk Service Brazil
Brazil at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast
Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Sovereign risk
Current assessment
Positive factors
Negative factors
Outlook
Currency risk
Current assessment
Positive factors
Negative factors
Outlook
Foreign-exchange regime
Banking sector risk
Current assessment
Positive factors
Negative factors
Outlook
Generic risks
Political risk assessment
Economic structure risk assessment
Country risk
Overall country risk
Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk
Central scenario for 2013-17: Political stability
Central scenario for 2013-17: Election watch
Central scenario for 2013-17: International relations
Central scenario for 2013-17: Policy trends
Central scenario for 2013-17: Fiscal policy
Central scenario for 2013-17: Monetary policy
Central scenario for 2013-17: Economic growth
Central scenario for 2013-17: Inflation
Central scenario for 2013-17: Exchange rates
Central scenario for 2013-17: External sector
Central scenario for 2013-17: External financing requirement
Central scenario for 2013-17: External debt
Key risk indicators
Ratings summary
Quarterly indicators
International assumptions summary
Economic structure
Public finances
Exchange rates, interest rates and prices
Financial sector
Current account
International liquidity
Foreign payment and liquidity indicators
External trade
External financing requirement
External debt stock
External debt service
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