January 2, 2019

EASIER SAID THAN DONE:

Brazil markets soar as new government vows to shrink state (Anthony Boadle, 1/02/19, Reuters)

Brazil's real currency strengthened 2.4 percent and the Sao Paulo Bovespa stock index rose 3.6 percent as investors cheered pledges by Economy Minister Paulo Guedes - a former investment banker - to reduce taxes and overhaul Brazil's costly social security system.

"If we have solid pension reform, we will get 10 years of growth," said Guedes, who heads a team of orthodox economists already being likened to the 'Chicago boys' who radically overhauled Chile's economy in the 1970s and 1980s.

Guedes said he planned to cut Brazil's tax burden to 20 percent of gross domestic product from 36 percent, free the credit market from overcrowding by state banks, and reduce protectionism.

Posted by at January 2, 2019 7:04 PM

  

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