Brazil debt risks: private sector still poses the greatest threat

Some commentators have argued that the deterioration in Brazil’s public finances in recent years has raised the risk of a fiscal crisis during the next presidential term, which runs from 2015 to 2019. We’re not so sure. The fiscal position has certainly deteriorated under President Rousseff. But in our view the bigger concern lies in the rapid expansion of private debt. This is the area to watch over the next couple of years.