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Bond Market News

Brazil Shows Fiscal Outlook Improvement

December 15, 2021

Brazil’s recent fiscal outlook shows the best budget numbers in several years for the country. Brazil is on track to post its lowest government spending at 18% of GDP and the smallest budget deficit since 2014, falling to 0.4% of gross domestic product by the end of 2022Gross debt is predicted to fall to 80.6% of GDP in 2021, from 88.8% in 2020. The benchmark stock index has surged 6.3% since hitting a 13-month low on December 1. Analysts said that the country’s projections made some of the investors’ pessimism disappear. Brazil’s economy minister Paulo Guedes said on December 7 during an online event with investors, “Ours will be the first government that is getting out spending less than when we came in. These are hard facts. You hear a lot of noise on fiscal sustainability in Brazil, on how fiscal policy is loose, but I can assure you that this is noise.”

Brazil’s USD bonds have been increasing since the beginning of the month with its 5.625% 2041s up 2.19 points yesterday to 102.09, yielding 5.45%

For the full story, click here

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