“Brazil has gotten it wrong since the beginning of the Dilma cycle,” he said about the country’s recent interest rate hikes. “They put themselves in a situation that is the worst-case scenario for (emerging markets): stagflation—low growth and high inflation.”
Luis Oganes, global head of emerging markets research at JPMorgan Chase, also touched on the political situation ahead of presidential elections in October.
“Inflation is still a problem, and unfortunately in Brazil cutting rates won’t help growth,” Oganes said at the conference. “You need reforms … and ahead of an election no one is going to invest more in Brazil if they cut rates.”