Investor Presentaiton
Taming Inflation: A tale of 15 years
Recent Brazilian macro economic history can be divided in three phases:
1. Initial efforts to
curb inflation
(Jul/94-Dec/98)
2. Fixing the
collateral damage
(Jan/99 - Dec/03)
3. New growth
cycle takes shape
(04 - ??)
- Artificially overvalued currency peg
-
- Very high real interest rates
Growing current account deficits and foreign exchange debt
- Lower inflation boosts investment and productivity
- Extended period of undervalued currency
-
Beginning of interest rate and sovereign debt reduction
cycle
- Improved current account and foreign debt
- Poor economic growth (subdued investment and
productivity)
-
No foreign exchange debt / lower overall sovereign debt
Currency back to "normal" / lower interest rates
- Growth in credit penetration
- Formalization, investment and productivity break out.
DYNAMO
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