Brazil: Selected Issues

International Monetary Fund

No 2017/216, IMF Staff Country Reports from International Monetary Fund

Abstract: This Selected Issues paper examines the proximate causes of dramatic fall in investment in Brazil and the prospects for investment going forward. A variety of factors contributed to the investment decline, including deterioration in Brazil’s medium-term growth prospects, rising real interest rates, falling terms of trade, rising uncertainty related to economic policy, rising levels of corporate leverage and lower cash flow. Some of the factors that have weighed on investment over recent years have begun to normalize providing some impetus for a recovery. However, still-high levels of corporate leverage and the prospect of continued uncertainty related to economic policy settings suggest a turnaround in investment is likely to be subdued.

Keywords: ISCR; CR; Brazil; resource misallocation; inflation expectation; experience reversal; inflation response; government worker; financing investment; Income; Income inequality; Fiscal consolidation; Inflation; Income distribution; Global; Africa (search for similar items in EconPapers)
Pages: 111
Date: 2017-07-13
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Citations: View citations in EconPapers (1)

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