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Brazil: No positive signals as economy continues to plunge - Wells Fargo

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 3, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Córdoba) - According to Eugenio Alemán, Senior Economics at Wells Fargo, the latest GDP report from Brazil showed that the economy continues to plunge and the outlook is showing no positive signals.

    Key Quotes:

    “The Brazilian economy contracted 4.5 percent from a year earlier. On a year-over-year basis, the only positive contribution came from exports of goods and services, which posted a growth rate of 1.1 percent. Personal consumption expenditures, on the other hand, plunged 4.5 from a year earlier while imports of goods and services collapsed 20.0 percent. Meanwhile, gross fixed investment declined 15.0 percent.

    “From this report there doesn’t seem to be any indication that the end of this economic environment is near. Furthermore, since the only positive contribution was from Brazilian government production and expenditures the situation is unlikely to improve in the near term. Brazil needs the private sector to rescue the economy.”

    “The current fiscal position of the Brazilian government gives it very few degrees of freedom to help economic growth. This is a great opportunity to rekindle abandoned/postponed structural reforms. However, for this to happen the country needs strong leadership and today’s Brazilian political environment does not appear to be fertile ground for reforms.”
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