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CHALLENGES AND PROSPECTS FOR THE BRAZILIAN ECONOMY
José Augusto Coelho FernandesPolicy and Strategy Director, CNI Brasilia, August 31th,
2015
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1.The Brazilian economy is under an intense process of adjustment and course correction.
2.The fall in oil prices and the developments at Petrobras have severe effects on both the economy and institutions.
3.Adjustments started in the fiscal area. The expectation is that new steps will be taken towards a pro-competitiveness agenda.
4.Politics and economy interact and turn the environment more complex.
Where we are
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A sign of the need for adjustment:
Twin deficits
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Economic policy and growth
THE CHALLENGE
Macroeconomic adjustment
Competitiveness agenda
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The steps of adjustmentPhase I
Tariff realism
Adjustment of public accounts
Streamlining of subsidies
Adjustment of exchange rate
Reform of social benefits
Contractionary monetary
policy
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Competitiveness initial actionsPhase II
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The ways out of the crisis: what is feasible?
Exports
Investment in
infrastructure
Regulatory reforms
Domestic
consumption
Government expenditure
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How long will recovery take?
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The possible recovery dynamics
RECOVERY
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Exchange rate devaluation
+Real wage fall
Exports
Inflation reduction
Moderate
Monetary Policy
Increase in families disposable
income
i
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Yes, many issues to face
but...
Institutions are a source of confidence
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External control agencies ranking
Source: MELO, Marcus. Seminário IBRE — A AGENDA DE CRESCIMENTO DO BRASIL, 2015
Brazil
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Justice independence in Latin America
Source: MELO, Marcus. Seminário IBRE — A AGENDA DE CRESCIMENTO DO BRASIL, 2015
Brazil
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Public administration quality
Source: MELO, Marcus. Seminário IBRE — A AGENDA DE CRESCIMENTO DO BRASIL, 2015
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Constitutional powers of the presidents
Source: MELO, Marcus. Seminário IBRE — A AGENDA DE CRESCIMENTO DO BRASIL, 2015
Brazil
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And…
INDEPENDENT MEDIA
ACTIVECIVIC
SOCIETYCONGRESS
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The industry agenda
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The industry agenda
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