Prospects for Brazil to end-2016

Subject

Prospects for Brazil to end-2016.

Significance

Brazil enters the second half of 2016 immersed in profound political and economic crises. Financial markets and businesses welcomed the replacement of suspended President Dilma Rousseff by Michel Temer in May and applauded his reform and austerity agenda for the precarious fiscal situation. However, the new government is also being engulfed in the Petrobras-centred corruption scandal. Adding to the uncertainty, the Senate is yet to make a final decision on Rousseff's impeachment. In the meantime, the recession that started in the second quarter of 2014 continues.