Investors 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.
It’s a dramatically different picture than when Barbosa’s predecessor, Joaquim Levy, was named finance minister late last year. While Levy was the market’s golden boy for his reputation as a fierce budget cutter and former asset manager, investors aren’t giving Barbosa the benefit of the doubt. Markets reacted to the announcement of the new finance chief on Friday by dumping both stocks and bonds amid speculation Barbosa won’t be as aggressive in cutting spending and will be beholden to political interests.
Brazil Energy Insight 
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