From the FT:
“Brazil’s economy is like a bicycle. It works so long as it keeps moving. This has been easy over the past decade. High commodity prices have boosted the value of Brazilian exports. Ample credit has meanwhile kept the domestic economy zooming. Now, however, the cycling is getting harder.”
The author of this article goes on to explain how a strong currency hurts Brazil’s economy. The solution for this problem, he adds, is not an easy one.
“One way for the Brazilian bicycle to keep moving is to get the exchange rate down. But Brazil has already tried partial capital controls and massive currency intervention; neither have worked. Another is to cool internal demand by cutting wasteful government spending: Brazil should be running budget surpluses now instead of deficits. But getting spending cuts through Congress has proved very hard. A third alternative is to raise taxes on the commodity sector.”

“The Brazilian bicycle is not yet in danger of stopping. But it is wobbling.”
Full article here.
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