Brazil Should Prioritize Public Investment: Deutsche

Brazil’s discretionary fiscal policy measures should be focused more on increasing public investment rather than increasing domestic consumption , according to Deutsche Bank analysts. The level of government consumption is already high in Brazil, says the shop, and is one of the main causes of high interest rates and low domestic investment. Brazil’s public debt position is also much less sound than China’s, making temporary investment measures preferable to potentially more permanent consumption measures, it adds. Over the longer term, Brazil will have to raise its savings and investment ratios if growth is to meet the government’s informal expansion target of 5%, says Deutsche.