Despite mounting public opposition, President Temer’s reform agenda is inching ahead in Brazil. Labour market reforms have passed the lower house, but the real test lies ahead with pension reform. The pension bill is now out of committee but the race is on to find the necessary votes to pass the bill in Congress. A failure to pass it is unlikely to inflict immediate damage to the economy, as some seem to fear. But it would send financial markets into a tailspin and place a huge question mark over the long-run sustainability of the fiscal position.
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