Brazil economy cannot expect policy led support to grow

Structural reform can help Brazil in the longer  run, but the possibility of medium-term recovery depends on the potential improvement in the external demand scenario. 

"Following recent inflation releases, 2015 inflation is forecasted at 8.8%, but 2016 and 2017 inflation forecasts are revised up to 6.6% and 5.8%. The growth forecast for 2016 has also been revised down by 0.1pp to -0.7%", says Societe Generale.

These revisions in Brazil's economic growth might be done by assuming a greater-than-previously-expected fiscal drag and despite the possibility of better external sector growth prospect on significant currency depreciation. Overall, the above updates on macro/rate forecasts mean the economy cannot expect policy-led support to grow in the medium term.