Download our Brazil note "2021 budget highlights fiscal challenges ahead"
- The 2021 budget points to a very challenging outlook, and fiscal populism will continue to be the main risk to monitor next year
- The spending cap will remain the only fiscal anchor in 2021, but the government will struggle to comply with it
- While automatic spending cuts likely to be triggered by the rule could be positive, any attempt to change the rule will be a strong negative
- Q2/20 GDP posted the sharpest drop on record, but the emergency aid measures will continue to drive the recovery through H2/20
- Progress on reform has brought some relief to markets