Carla Mozee-Market Watch, 09/18/2009
Uncertainties remain after it leads Latin America out of recession
Brazil has climbed out of recession and appears on the verge of receiving a new investment-grade rating. But along with the positive developments hangs unease among some market professionals about Brazil’s short-term ability to close the funding gap that was created as it fended off the worst of the global financial crisis.
Like many other countries, Brazil made a number of moves to shield its economy from the effects of the worldwide credit crunch that triggered a pullback in demand for goods and stoked fears about the health of financial markets. Initiatives included tax breaks for the purchase of certain durable goods and a plan to create low-income housing.
The stimulus was “one of the cheapest programs in the world,” with “one of the best results,” Brazilian Finance Minister Guido Mantega told participants last week during a conference call about Brazil’s return to growth in the second quarter.