Brazil's Golden Boy Is Gone. Bond Traders Don't Like It One Bit.
- Markets aren't giving benefit of doubt to new finance minister
- Traders see weaker real, higher interest rates under Barbosa
Nelson Barbosa, Brazil's new finance minister, left, sits next to Joaquim Levy, the former finance minister, during his inauguration in Brasilia, Brazil, on Dec. 21.
Photographer: Lula Marques/BloombergInvestors in Brazil aren’t holding out much hope that its new finance minister can turn the economy around and shore up the nation’s finances. To be fair, it’d be a tough job for just about anyone.
Nelson Barbosa takes over as head of President Dilma Rousseff’s revamped economic team as Latin America’s largest economy is in the middle of its longest recession since the 1930s. The budget deficit has swollen to 9.5 percent of gross domestic product as surging joblessness and bankruptcies pare tax revenue. And a wide-ranging corruption scandal, which has crippled some of Brazil’s biggest companies and left top politicians fighting for their political survival, is showing no signs of easing.