Now that Brazil’s President Dilma Rousseff is to stand trial following an impeachment vote in the Brazilian Senate, a new government under Vice-President Michel Temer has been formed.
“He plans to replace… confidence-stifling interventionism with market-friendlier policies,” notes Economist.com. But this may be easier said than done.
Legislators may resist belt-tightening in the run-up to October’s local elections, and his caretaker government “lacks the legitimacy for more radical structural reforms”.
Still, as we noted last month, Brazil is so cheap on a cyclically adjusted price/earnings ratio of just over eight that the current imbroglio is priced in – and its long-term potential makes it well worth a look.