Brazil’s recent fiscal outlook shows the best budget numbers in several years for the country. Brazil is on track to post its lowest government spending at 18% of GDP and the smallest budget deficit since 2014, falling to 0.4% of gross domestic product by the end of 2022. Gross debt is predicted to fall to 80.6% of GDP in 2021, from 88.8% in 2020. The benchmark stock index has surged 6.3% since hitting a 13-month low on December 1. Analysts said that the country’s projections made some of the investors’ pessimism disappear. Brazil’s economy minister Paulo Guedes said on December 7 during an online event with investors, “Ours will be the first government that is getting out spending less than when we came in. These are hard facts. You hear a lot of noise on fiscal sustainability in Brazil, on how fiscal policy is loose, but I can assure you that this is noise.”
Brazil’s USD bonds have been increasing since the beginning of the month with its 5.625% 2041s up 2.19 points yesterday to 102.09, yielding 5.45%
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