Jeremy Warner – The Telegraph, 10/28/2014
The definition of an emerging market, it was sometimes said – in the days before Goldman Sachs led the stampede of Western money into the developing world – is one from which it is impossible to emerge in a crisis. Investors will know the feeling as they survey the damage to their wealth inflicted by the re-election of the centre left Dilma Rousseff as president of Brazil this week.
In dismay, the Brazilian Ibovespa was down a stomach churning 6.2pc and the Real, in precipitous decline for some years now, fell another 3pc. Investors had hoped for a return to the “Plano Real” and the pro-business agenda of Fernando Henrique Cardoso in the mid-90s to early noughties; instead it’s at least another four years of Workers Party interventionism they have to look forward to.
Brazil is not yet in fully-blown crisis mode, of the type which Latin America seems perennially prone to, but it is self-evidently already on a very slippery slope. Growth has slowed to a virtual standstill, inflation is again climbing towards double digits, and investment has slumped.