Inflation of 5.84% persists despite a 2.25 percentage point increases to the benchmark Selic rate and economic growth is expected to be just 2.5% this year, a third of what Brazil posted in 2010. [Brazilian Burn: Brazil ETFs Back to Multi-Month Lows]
“It was a bad result that shows the economy is weaker than expected,” Flavio Combat, an economist at Concordia Corretora in Sao Paulo, said in a Bloomberg article. “Perhaps slowing economic activity will not allow for a strong tightening in monetary policy.”
Standard & Poor’s ratings firm has expressed concern over Brazil’s worsening fiscal accounts and may even downgrade the country’s BBB credit rating. Both S&P and Moody’s Investors Services have lowered their outlook on Brazil’s sovereign rating.
Some broad Brazil ETFs include:
- iShares MSCI Brazil Capped ETF (NYSEArca: EWZ): down 12.6% year-to-date
- First Trust Brazil AlphaDEX Fund (NYSEArca: FBZ): down 12.6% year-to-date
- Global X Brazil Mid Cap ETF (NYSEArca: BRAZ): down 10.8% year-to-date
- Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF): down 26.6% year-to-date
- iShares MSCI Brazil Small Cap ETF (NYSEArca: EWZS): down 25.1% year-to-date
- db X-trackers MSCI Brazil Hedged Equity Fund (NYSEArca: DBBR): down 1.8% year-to-date
For more information on Brazil, visit our Brazil category.
Max Chen contributed to this article.