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Weekly Report - 22 December 2016 (WR-16-50)

BRAZIL: Crisis accentuates Brazil’s regional divide

2016 was a crisis-fuelled year for Brazil. The impeachment of President Dilma Rousseff (2011-2016) in August ushered in a new era of political instability, while deepening corruption investigations have prompted a string of high-profile resignations from businessmen, congressmen and cabinet ministers alike. Meanwhile, the country is still suffering from one of the worst recessions in its history. Amidst this economic and political turmoil, the government has passed one of the most extreme austerity programmes in the world. Designed to woo investors by promising economic stability, the reform imposes a cap on public spending for the next 20 years in line with inflation, even if the economy grows again. However, the same lack of financial flexibility which captivates global markets may punish Brazil’s poorest.

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