Brazil Scores 3 out of 5
- NFM = 0
- Government Debt = -0
- Inflation = 1
- Currency = 1
- Interest rates = 1
Brazil has done exceptionally well in the last years with its economic policy. Inflation has gone from chronic to manageable. Despite warning shots from the US regarding tariffs, the currency has appreciated noticeably against the US dollar in the last year. Confidence that inflation can be controlled led the Central Bank to cut interest rates at the June meeting.
Brazil's weaknesses are its Current Account Deficit/GDP and its level of Government Debt/GDP. But, given the high yields Brazil offers combined with improving inflation and interest rates, Brazilian paper plays well above its score of 3.
NFM — Current Account/GDP
Brazil's Current Account/GDP, an indicator of need for money or financing, has been negative for years. Given it is still better than the danger level of -4%, trending unchanged, and that its exports will benefit from higher oil prices in 2026, the NFM score is 0.
Government Debt/GDP
Brazil has long had a chronic debt to GDP problem. The level of 77% is high, and it is an election year, meaning government spending has not been cut back. Until Brazil lowers its Government Debt/GDP it will always be scored low. The Government Debt/GDP is -1.
Inflation
Inflation has long been a big problem in Brazil. In the year the government has been able to control inflation and bring it down to 4.72% from 5.35% one year ago. This is a good result. For control of inflation, Brazil gets a 1.
Real vs USD
The Brazilian Real has done well versus the US dollar in the last year, appreciating over 7% versus the US dollar. This is truly impressive given the 50% tariffs threatened by the US on Brazil exports. Given its ability to appreciate versus the USD in these times, Brazil scores a solid 1.
Interest Rates
Brazil has long had an inflation problem and a government debt problem. Despite these weaknesses, Brazil has kept interest rates moderate and recently cut the rate by .25% in June. This impressive feat scores Brazil a 1.
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