We maintain a firmly negative stance on the Brazilian real, expecting additional downside in light of very weak macroeconomic fundamentals, which will limit capital inflows, and a significant deterioration in the terms of trade over recent quarters. However, we are beginning to explore the potential that our outlook on the currency is too bearish.
Brazil's current account deficit will continue widening in 2015, due in large part to structurally weaker goods trade dynamics. Meanwhile, a weak growth outlook and poor business environment will temper investment inflows, keeping the country's balance of payments position under pressure.
Brazilian President Dilma Rousseff will remain in power even as a corruption scandal at national oil company Petrobras has implicated several members of the ruling legislative coalition. That said, the president will struggle to retain control of the country's legislative agenda due to widespread public unrest and minimal political capital.
Complete the trial form to receive a free issue of Latin America Monitor sent to your email address. The Latin America Monitor provides you with in-depth country by country data, analysis and forecasts.
START A FREE TRIAL TODAY
STEP 2: SELECT PRODUCTS
Please select the free products you would like to trial:
Thank you for your interest in Latin America Monitor
You will shortly receive an e-mail with link(s) to a full version of the newsletter(s) you selected. A member of our Client Services team will be in touch soon to receive your feedback on the newsletters and arrange a convenient time for a free demonstration of the full service. If your enquiry is urgent, please email our team here Thanks, BMI Research