US sub-prime woes ‘not likely to hit Brazilian economy’
While the Brazilian stock market has been rocked by the recent instabilities surround US sub-prime loans, the economy itself is expected to ride the storm.
Ratings body Moody’s recorded that Brazil’s markets were the second most affected after Argentina, due to the comparative attractiveness of the market.
Alfredo Coutino, senior economist at Moody’s told Thompson Financial that the most attractive markets in South America were the most affected because they have an large proportion of speculative investment.
However, the fall in prices on the market, which are still below the pre-crisis levels, are expected to remain within the financial arena, and not affect the economy and the Brazilian property market as a whole.
The report concludes that only a major recession in the US stemming from the sub-prime instabilities could rock the Brazilian economy as the current recovery in the country’s economy is based on strong economic fundamentals.
