September 3, 2007
Brazil is in a comfortable” position in relation to the financial crisis but is still vulnerable, says Ita’s Malaga
Brazil has ridden out the storm of the current crisis and is in a comfortable position because it has taken important steps to improve the quality and structure of its debt, says Tomas Malaga, the chief economist of Banco Ita. However, he warns that if the crisis gets worse then foreign investors will reduce their exposure and Brazil will start losing some of its large foreign reserves. Malaga makes his comments in an interview with Brazil Political Comment in which he urges the government to aim for a fiscal surplus and explains why he thinks GDP could grow by as much as 5% this year. He also explains why he thinks Brazil’s macroeconomic policies are here to stay. Here is an extract: “I do not think any political party – the PT or the opposition – will try and alter the macroeconomic policies. All the parties realize the importance of economic stability. The opposition will try and exploit the discontent over taxation and the destination of these taxes, particularly among middle and higher income groups. However, I dont see this leading to the kind of polarization that has happened in Venezuela.”
Read the full article at www.brazilpoliticalcomment.com.br..
You can also read John Fitzpatrick’s article “The Lord Mayor Goes Zapping the NYSE in Brazil” in which he looks at the recent visit of the Lord Mayor of the City of London who tried to persuade Brazilian companies to list on the London Stock Exchange. Here is an excerpt:” London has had great success in attracting companies from Europe and Asia but its record for Latin American companies is poor. I could only find two Latin American companies listed on the main market – a bank in Chile and an autoparts manufacturer from Argentina. No Mexican company is listed there which means that not a single company from the two largest Latin American economies – Brazil and Mexico – trades in London. Compare this with New York where a total of 90 Latin American companies are listed. Brazil leads the way with 38 companies, followed by Mexico and Chile with 17 each, and Argentina with 12.”
Brazil Political Comment in the Media. John Fitzpatrick will be appearing on the BBC World Service Business Program shortly to give his assessment of the current political and economic scene. In August, he was interviewed by Jamaica’s Radio 102 FM during the visit of President Luis Inacio Lula da Silva to Jamaica. Fitzpatrick is also a contributor to a book on the changes Brazil has undergone over the last 30 years to be published later this year by the São Paulo Foreign Correspondents Association.
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