Brazil’s problems strike the micro more than the macroeconomy

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Brazil’s problems strike the micro more than the macroeconomy

Fourth week
May 2017

Last week, there were two political events originated in the external front that may have an impact on the local macro: Trump is under scrutiny for his link with Russia and Brazil’s President Temer is under the microscope for corruption scandals. Although it is yet premature to accurately guess the the magnitude of the impact these events could cause, the second one demands more attention since it takes place in our neighbourhood and affects our biggest financial partner. The transmission channels for an external shock from Brazil are basically four.