Tuesday, May 2, 2017

LatAm in Focus: Fitch's Rafael Guedes on Brazil's Economy

By Luisa Leme

The rating agency’s managing director in Brazil explains the country’s rocky road toward growth.

</p> <div class="wrapper" style="width: 100%;"> <table align="right" border="0" cellpadding="5" cellspacing="5" style="width: 30%;"> <tbody> <tr> <td> <p style="text-align: center;"><em><b style="font-size: 20px;"><img alt="" src="/sites/default/files/Rafael_GuedesHeadshot_0.jpg" style="width: 100%; height: 100%;" /></b></em></p> </td> </tr> </tbody> </table> </div> <p>Are Brazil’s worst recession days over? The government announced a rebound in economic growth, lower inflation numbers, and friendlier interest rates, <a href="http://www.cnbc.com/2017/04/17/brazils-economy-grew-at-fastest-pace-since-2010-its-stocks-are-flying.html">leading investors to show optimism</a> about the country’s economy in the first quarter of 2017. And new headlines about corruption scandals <a href="https://www.bloomberg.com/news/articles/2017-04-17/brazil-s-end-of-the-world-plea-bargain-can-t-stop-market-bulls">have not stopped the rally</a>.</p> <p>After years of uncertainty, market confidence might be testing the Brazilian waters again, but the government’s pension reform proposal needs to become a reality for the country to regain its investment-grade credit rating, Fitch Rating’s Rafael Guedes told AS/COA Online’s Luisa Leme.</p> <div class="wrapper" style="width: 100%;"> <table align="left" border="0" cellpadding="5" cellspacing="5" style="width: 40%;"> <tbody> <tr> <td> <p style="text-align: center;"><a href="http://www.as-coa.org/events/2017-latin-american-cities-conferences-são-paulo"><img alt="" src="/sites/default/files/EventPageBanner_SaoPaulo2017_1.jpg" style="border-width: 0px; border-style: solid; width: 100%; height: 100%;" /></a><br /> <b style="font-size: 20px;"><a href="http://www.as-coa.org/events/2017-latin-american-cities-conferences-s%C3%A3o-paulo">Tune in May 12 to our 2017 São Paulo conference.</a></b><b style="font-size: 20px;"> </b></p> <p style="text-align: center;"> </p> </td> </tr> </tbody> </table> </div> <p>Guedes, who heads the ratings agency practice in Brazil, says recent negotiations have diluted the fiscal impact of the pension reform by nearly <a href="http://www.valor.com.br/brasil/4950014/alteracoes-em-reforma-da-previdencia-reduzem-economia-em-r-189-bi">20 percent</a> and the window of time for the federal government to accomplish its goal of passing the measure is only about six to eight months, he explains, due to next year’s presidential election. Roughly <a href="http://g1.globo.com/economia/noticia/71-sao-contra-reforma-da-previdencia-aponta-pesquisa-datafolha.ghtml">75 percent of Brazilians are against </a>the reform and <a href="https://www.nytimes.com/2017/04/28/world/americas/brazil-general-strike.html?_r=0">they took to the streets</a> on April 28 to express their opposition.</p> <p>Still, Guedes says that even if the recession and political crisis have changed Brazil, more change is needed. “Brazil has to adjust to the modern economy, to less generous social security rules, to modern labor laws, because Brazil is not competing with Brazil,” he says. “Brazil is competing with all economies globally.” </p> <hr /> <ul> <li><span style="font-family: inherit; font-size: inherit; font-style: inherit; font-variant-ligatures: inherit; font-variant-caps: inherit; font-weight: 700;">Enjoy this podcast? </span><a href="https://itunes.apple.com/us/podcast/latin-america-in-focus/id1089353175" style="font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; box-sizing: content-box; margin: 0px; padding: 0px; border: 0px; font-stretch: inherit; line-height: inherit; vertical-align: baseline; color: rgb(0, 119, 145); text-decoration-line: none;" target="_blank">Subscribe to Latin America in Focus on iTunes</a><b>!</b></li> </ul> <hr />

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LatAm in Focus: Fitch's Rafael Guedes on Brazil's Economy

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