Brazil’s economy has stumbled badly, but some analysts say upcoming elections and fresh polls showing rising dissatisfaction with the government could herald a change.
“The consensus is still that (President) Dilma Rousseff will win reelection” when the country votes on October 5, Tony Volpon, strategist for Latin America at Nomura, told CNBC. “But the government favorability ratings have been dropping like a stone. The latest poll numbers put that at 31 percent,” he added.
Volpon believes the current government’s policies have done “real damage” to some sectors of the economy, citing in particular the negative effects on the energy sector of refusing to allow gasoline and electricity prices to rise in an effort to control inflation.
Economic growth in Brazil has slowed in recent years, with gross domestic product (GDP) expanding just 2.3 percent last year, compared with 7.5 percent in 2010. The International Monetary Fund (IMF) forecasts growth of just 1.8 percent for 2014. Brazil needs annual GDP growth of an average 4.2 percent through 2030 to lift half of its vulnerable population into the middle class, economists at NBER recently estimated.
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