New Study: Brazil Country Risk Report Q3 2015

Core Views

* Brazil is on the cusp of an economic policy shift. The appointment of an investor-friendly finance minister is set to begin reversing the fiscal deterioration seen in the last few years and the central bank is more strongly committed to reining in inflation. That said, these shifts will be slow to translate into stronger real GDP growth given a number of domestic and external headwinds.
* We see little upside for Brazilian real GDP growth in the next few years. Significant headwinds to fixed investment and private consumption will see real GDP contract by 0.5% in 2015 before returning to growth of just 1.0% in 2016.
* A greater commitment to tackling inflation will see the central bank hike the benchmark Selic target rate by another 75 basis points (bps) to 13.50% by end-2015. This will bolster the bank's inflation fighting credentials but will not succeed in bringing headline inflation back with its 4.5% +- 2.0% tolerance band this year.
* The widespread public protests that took place in June 2013 marked a turning point for the Brazilian electorate. Public unrest will flare up intermittently until significant progress on promised reforms, including higher-quality public services and greater government transparency, begins to take shape. In line with this view, an ongoing corruption scandal at national oil company Petrobras will continue to drive public protests in the coming months.

Full Report Details at
- http://www.fastmr.com/prod/987509_brazil_country_risk_report_q3.aspx?afid=301

Major Forecast Changes

* We have downgraded our 2015 and 2016 real GDP growth forecasts to -0.5% and 1.0% respectively. In particular, fixed investment growth will be more subdued than we previously anticipated, as an ongoing drought raises investor concerns over the price and consistency of power supplies and the corruption scandal at Petrobras severely dampens business confidence.
* We downgraded our average exchange rate forecast from BRL2.850/USD to BRL3.150/USD in light of a significant sell-off in the last few months, as well as our expectation for more...

The Brazil Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Brazil. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Brazil's economic, political and financial prospects through end-2019, just published by award-winning forecasters, BMI Research.

Key Uses

* Forecast the pace and stability of Brazil's economic and industry growth through end-2019.
* Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.
* Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.

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