CNBC also did a long coverage on the "potential biggest growth opportunity in the world" and also the Guardian has a long coverage on Brazil in it's edition of today.
Personally I wonder what the interest rates will do. Inflation is currently at 4,7% probably up to 5,1% by the end of this year. The SELIC intrest rate was left unchanged at 11,50% for a long time and was increased to 11,75% last April. A lot of criticism came on this decission of the Central Bank of Brazil. Just like the ECB, they want to keep inflation controlled at all cost. Guido Manteiga, the minister of economy of Brazil would rather see more investments and production capacity as a solution to control inflation. Personally I like the balance between both forces; but eventually interests rates will get down by 2010.
And this is where the potential of Brazil resides: it's enormous output gap. The output gap of Belgium is minimal. Actually I believe it's negative and I'm still stunned seeing no politicians standing up with the question "how should we deal with a longterm future of a negative output gap". The question for Brazil is how fast it can gear up on infrastructure, education and optimising the context for SME to be able to truly unleash this ouput gap that has been building up for the last 26 years?
