Brazil has sold off as the market fears the country is in trouble. If the huge pension program is not reformed, it will add expense to a budget already in deficit – and reform has proven extremely difficult. On top of this, there will be a new President elected in October. The race is so open and full of new and anti-establishment candidates, there is a fear that reform may languish along with the country’s finances.
In our latest Viewpoints paper, Brazil: The Moment of Truth, Portfolio Manager David Souccar looks around this corner and explains why we believe whichever government wins, it will have little choice but to reform.