Brazil: Still strong despite downward growth revisions
Despite this week’s downward revisions to Brazil growth by the central bank’s survey of economists, we continue to like the country as the major Latin American market most likely to receive foreign private investment, resume vigorous economic growth and pass substantial economic reforms that should make its finances even stronger.
The survey’s revisions see 2019 growth of 1.95% (down from 1.97% from the previous survey), 2020 growth of 2.58% (down from 2.70%) and inflation in 2019 of 4.06% (up from 3.90%). In our view, the revised numbers are still strong, particularly given that the country is recovering from one of the deepest and longest recessions in its history.
In addition, we argue that investors remain mostly focused on the Pension Reform that is currently under discussion in Congress. Once this has been dealt with, investors are likely to focus more on what are still improving fundamentals.
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