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New Brazil government faces economic challenges

Monday, February 20, 2023


For 2023, the market expects a significant slowdown, with growth of around 0.8%. This presents a highly challenging context for President Luiz Inacio Lula da Silva and his finance minister, Fernando Haddad.


  • The Bolsonaro government’s "fiscal bombs" will contribute to a significant fiscal deterioration this year.
  • Market concerns over Lula’s policy plans could reinforce expectations of a slowdown this year.
  • Global market intelligence firm FrontierView forecasts growth of only 0.7% this year.
  • A key challenge will be how to make short-term fiscal flexibility and long-term fiscal sustainability compatible.

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