Brazilian tax is a warning to foreign investors, says Morgan Stanley

The chief economist for Brazil at Morgan Stanley, Ana Madeira, said this Tuesday (9) that the Brazilian fiscal arrangement remains a warning point for the attractiveness of foreign investors.

"When we monitor the fiscal measures that were taken and the data within these fiscal measures, which have a direct impact on the accounts, and the indirect impacts with quasi-fiscal or quasi-fiscal measures, we arrive at a sum that is significant", observed the economist, during a Lide seminar in São Paulo.

"It's something that, in our view, is also starting to weigh a little on investors' minds," he added.

Madeira recalled that the country has undergone a rebalancing of risks since the beginning of the year. "We saw a reduction in the risk of Brazil that foreign investors had," he said.

At the beginning of the year, according to her, Brazil was "relatively well positioned", with a high carry, an appreciating real and lower volatility, given the lack of major news in the fiscal area at the moment.

Soon after, he stated, the oil shock came, and Brazil was one of the countries least directly affected.

"It is a net exporter of oil, the high price per barrel helps the fiscal sector, and, from an inflation point of view, the country is able to delay the effects of the shock with mitigation measures", highlighted the economist.

However, now, with the election cycle approaching, volatility traditionally tends to increase in the second half of the year.

"Soon, the theme for investors is starting to become a bit different, that is, the driving theme for market issues", he added, referring to fiscal concerns.

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Source: CNN