Macroeconomic Forecast Brazil

July 2008 | Macroeconomic Forecasts

Brazil's total external debt pile (private and public) appears to be on the rise again. Total external indebtedness reached US$201.6bn in Q108, up from US$193.6bn in the previous quarter. This marks the seventh consecutive quarter of rising external debt for Brazil. We have raised our 2008 forecast to US$212bn from previous projections for a US$187bn external debt stock. Thereafter, the level will decline gradually to US$198bn in 2009 and US$185bn by 2010. While Brazil's recently acquired status as official net foreign creditor (international reserves exceed external debt) suggests that a rising debt stock is not overly worrying, we note that tighter global credit conditions will put a strain on debt servicing obligations.

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