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Whilst commending Brazil for becoming a global force, an article in the Financial Times has criticised a number of issues that have been seemingly ignored including poverty, crime and inequality.

Moisés Naím – senior associate in the international economics programme at the Carnegie Endowment for International Peace – pointed out that the rapid credit boom (with extortionate interest rates); unprecedented rises in foreign direct investment and increased consumption have prompted a euphoria resulting in the country becoming recognised as one of the most expensive in the planet.  According to Naím, what brings even more concern is the fact that the country remains a very poor nation; has a comparatively low level of infrastructural investment and does not have the ability to continue to provide credit or maintain current public spending levels at its current pace.

Naím urged President Dilma Rousseff to undertake measures, despite political opposition, to avoid crises such as those that were seen in Mexico, Russia and several Asian economies.  He concludes: ´the danger is that Ms Rousseff does not act now and financial markets will in time impose the necessary corrections in a more brutal way. Exuberance and complacency are the two enemies threatening Brazil’s current success.´

Nevertheless, in her weekly public column ´Conversations with the President´ Dilma Rousseff assured that the recent measures being instilled will ´reduce inflation without compromising the growth of the economy´.  Salomão Quadros, economic analyst at the Getúlio Vargas foundation also pointed out, despite rises in petroleum prices that the main inflationary pressures the Brazilian government were concerned about are beginning to calm down.

Read the full FT article – ´End the party before Brazil’s bubble bursts´ – by clicking here.