The three biggest risks to Brazil’s economy – BTG Pactual’s André Esteves

RIO DE JANEIRO, BRAZIL – After a long period of booming stock markets, increased volatility has turned investors’ attention back to risks, and André Esteves, the senior partner of Brazilian BTG Pactual bank, points out three main threats.

Surprisingly, the greatest dangers do not stem from the troubled domestic market, hit by the pandemic and political tensions, but instead are concentrated abroad, according to the Rio de Janeiro billionaire.

During the BTG Invest Talks online event, Esteves began by citing his concern about the late withdrawal of stimulus in developed countries. For the executive, rich countries have overstretched aid and are late in normalizing monetary policy.

“The longer the delay in withdrawing stimuli, the bigger the impact may be, and with greater adversity for countries like Brazil,” he cautioned.

Secondly, Esteves noted the Evergrande Chinese real estate crisis and its impact on the entire national economy. Although he is confident that Beijing will eventually step in to try to contain the collapse, there are concerns over the impact on the world’s second largest economy.

Finally, the financial industry headliner pointed to the risk of a global energy crisis. As China and other major economies are reducing their production of coal-based energy, the pressure on prices is growing, already affected by the drop in supply during the pandemic, he said.

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