“At a time when Brazil’s economy is experiencing its worst recession in decades, threatened by a new fiscal retrenchment, Donald Trump’s victory opens the possibility for a disruption of global trade, Brazil’s last hope for a revival. Although Brazil doesn’t have any free-trade agreements with the US which could be put in jeopardy, almost one fifth of its exports go to China, which could certainly see its own international trade suffer,” according to a Seeking Alpha analysis of Brazil.
SEE MORE: Brazil ETFs Strengthen on Realistic Government Guidance
Brazil’s central bank has not hiked interest rates since last year. Brazilian stocks have rallied this year and banks in Latin America’s largest economy appear inexpensive, those institutions are faced with declining consumer credit quality. Additionally, some Brazilian states have recently delayed payment to public workers, potentially crimping the ability of those workers to repay loans taken from Brazilian banks.
“With Brazilian consumers cutting their spending fast and unemployment almost doubling from a couple of years ago, the export sector is the only one left which can save the country from a deeper dive into the abyss,” adds Seeking Alpha.
For more information on the Brazilian markets, visit our Brazil category.
iShares MSCI Brazil Capped ETF (NYSEArca: EWZ)
