Natixis’ Chief Asia-Pacific economist writes in IFR on why Brazil is playing with fire

NatixisAliciaGarciaHerrero_001.jpgWriting for IFR, Alicia Garcia-Herrero, Natixis’ Chief Asia-Pacific economist, argues why Brazil is suffering the consequences of a lack of reform during its golden age.

As the country sinks into what threatens to be its worst recession since the 1930s, rattled by political turmoil and in the midst of severe stagflation, Brazil is playing with fire. Although the immediate causes of its woes are external shocks from the commodities market, China and the US Federal Reserve – all of which have stalled Brazil’s economic growth engine – much of the country’s pain is self-inflicted.

To solve these problems, Alicia argues that Brazil must take control of its fiscal deficit and inflation in the short term, while also undergo dramatic structural reforms in the economy and attempt to regain its regional influence.

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