Consumer stocks rallied one day before the start of Banco Central do Brasil’s policy meeting.
Cia. Brasileira de Distribuicao Grupo Pao de Acucar, Brazil’s biggest retailer, gained 4.3 percent to 61 reais, while Marisa Lojas SA, a Brazilian apparel retailer, advanced 8 percent to 22.90 reais.
bloomberg.com
Yesterday’s announcement “shows that the government understands that if we do have a crisis, it’s a good opportunity to move into loose monetary policy and tight fiscal policy, to do the rebalancing that they didn’t do in 2008,” Gustavo Rangel, chief Brazil economist for ING Financial Markets in New York, said in a telephone interview. “Fiscal policy has been the biggest surprise of the Rousseff administration. That’s where she made her mark.”
The central bank declined to comment.
Rousseff is taking a different tack than her predecessor Luiz Inacio Lula da Silva, who increased spending by 49 percent in the two years since 2008 to lessen the impact of the global financial crisis on Brazil. The spending helped the economy expand 7.5 percent in 2010, the fastest pace in more than two decades, while stoking inflation
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