Global Conference 2011
Brazil: Too Hot, Too Fast?
Wednesday, May 4, 2011 / 9:30 am - 10:45 am
Faced with sluggish growth and low interest rates across the developed world, investors have flocked to emerging markets, bringing much-needed capital - but also a risk of inflation. This is especially true in Brazil, which posted a sizzling annualized growth rate of 9 percent during the first quarter of this year. With rising oil and food prices compounding the inflation problem, Brazil and some other emerging markets have increased taxes on foreign investors or raised banks' reserve requirements to try to slow inflows of hot money and ward off inflationary pressures. Brazil's central bank has raised interest rates, but did it act too soon? The fundamentals in Brazil are exciting, given the country's energy resources and the growth in consumer demand from a growing middle class. Will Latin America's most compelling success story continue?