The main issue in Brazil is currently the pace of growth of its economy. The strong economic rebound expected for early this year has not yet occurred.
Brazil is currently a two-speed economy, with industrial sector growth still lagging. In 2012, GDP is likely to grow at a sub-potential 2.5% (down from 2.7% in 2011). However, the strong pipeline of stimulus, together with a slightly weaker currency, should push growth higher in the second half of the year and into 2013. The Brazilian government is concerned that it acted too late during the 2008 crisis, thus Brazilian policymakers have taken the lead in stimulating growth and the policy mix should become even looser than it is already. Policymakers have considerable scope to undertake b...
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