Brazil: Is Lula 3.0 Good Or Bad For Markets?
The only feasible way for Brazil to stabilize its public debt-to-GDP ratio is by having nominal GDP growth meaningfully above government borrowing costs. This requires large fiscal stimulus to boost nominal GDP and much lower interest rates. These factors will constitute the economic policy anchor of Lula’s 3.0 presidency. When markets begin to price this in, the outcome will be chronic downward pressure on the currency.
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BCA Research | Emerging Markets Strategy
Critical input for global and EM investors as it provides global macro investment themes as well as recommendations for EM equities, currencies, and fixed income.
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