Brazil’s growth model under the spotlight

News that Brazil last year overtook the UK to become the world’s sixth largest economy is further evidence, if any was needed, of the continued rebalancing of global economic power towards the emerging world. But at the same time, the fact that Latin America’s largest economy flatlined over the second half of 2011 has slipped under the radar. While Brazil’s rise up the global league table is likely to continue over the coming years, its growth model is under increasing strain. Sustaining growth of more than 4% a year will require rebalancing the economy away from consumption and towards investment – something we fear will be easier said than done.