The stronger-than-expected performance of Jair Bolsonaro and his right-wing allies in Brazil’s election last Sunday has buoyed the country’s financial markets by reducing the risk of a dramatic shift to the left. But neither Bolsonaro nor Lula (who still looks favourite to win the presidency in the run-off later this month) appear to have the appetite to push through the reforms needed to lift growth and stabilise the public finances. Elsewhere, comments from Colombia’s president Gustavo Petro criticising the central bank’s (BanRep’s) latest interest rate hike are particularly alarming given the country’s large current account deficit.
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