Brazil’s president-elect Lula sent local financial markets into a tailspin late this week after he stressed the need for higher spending, reinforcing our concerns that the country’s public debt dynamics are likely to worsen. That added to an already bad week in Brazil’s markets, which saw bank stocks slump amid growing fears about the health of loan books. And the scale of the central bank’s rate hiking cycle means that bad loans are likely to rise further, weighing on growth. The good news for the region – and Brazil in particular – is that inflation pressures are showing further signs of easing.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services