As President Dilma Rousseff’s lead narrows in polls before October’s election, she and her top opponent are courting voters with spending promises that would undermine the fiscal discipline investors say is needed to restore confidence in the economy.
Brazil’s economy shrank in the third quarter more than analysts forecast as above-target inflation, deteriorating fiscal accounts and rising interest rates sapped confidence and crimped investment. Swap rates fell.
Brazil’s inflation in the month through mid-May was the slowest since November as food price increases eased, supporting analyst estimates the central bank will stop raising borrowing costs next week. Swap rates fell.