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National Perspectives on Global Leadership: Brazil

22/04/2009

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Denise Gregory

Executive Director (2006-2010), CEBRI

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Tomas Zinner

Vice-Chairman, CEBRI

In Brazil, initially the government took a very optimistic position towards the financial crisis, forecasting a 4 percent growth rate in 2009 and a small impact of the crisis on the economy. But now Brazil’s economy is suffering. The contraction in commodity exports and the crunch both in domestic and international credit, together with the problem of very large losses in the exchange derivatives, rising unemployment rates and slowing industrial production, generated a chain reaction that made economists revise downward their growth forecast and urge the government to take a more realistic position. The most efficient counter-cyclical instrument available to the Brazilian government is monetary policy. Compared to developed economies, there is limited room for fiscal stimulus in Brazil.



Centro Brasileiro de Relações Internacionais