YTD Bovespa: -25.26%

GDP growth: 3.14% YoY

Annual inflation: 7.33%

Unemployment: 6.33%

Investment surged thanks to the upcoming FIFA World Cup and Olympics, but industrial production has been slowing. Inflation is high, defaults on personal loans have been on the rise and investors have moved away from the stock market on fears that commodity prices could impact the country’s material producers. Fearing a slowdown at home and in the global economy, Brazil’s central bank recently cut interest rates.
Another major issue for Brazil is its currency. Ideally, it would like to keep its currency weak and its exports competitive. Finance minister Guido Mantega has warned of currency wars and has butted heads with China accusing it of manipulating its currency, even taking the issue up with the WTO. But recently, it has intervened in the currency market because the sudden weakness in the real could make inflation even harder for consumers in Brazil.

Meanwhile, Brazil is also planning a new, unpopular mining code that aims to change licensing policy and hike royalty rates, which could impact operations of mining giants like Vale and commodity prices.
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