More needs to be done to rebalance Brazilian economy

The strong performance of Brazilian investment in Q1 is promising, but it will have to be maintained for a sustained period in order to significantly ease the economy’s supply constraints and rebalance growth. In the mean time, growth is likely to be sluggish. As a result, there is nothing in today’s GDP data to change our view that a 25bp interest rate hike is the most likely outcome of today’s COPOM meeting.

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