New features of the Brazilian external sector since the great global crisis

Abstract

In Brazilian history, like in most peripheral countries, there were various episodes of “dollar shortage” leading to domestic crisis. From 2008 to 2014, many of the typical ingredients of such events were present: international crisis, volatile exchange rate, increasing current account deficits and subsequent decline in economic activity. This time, however, there was no lack of foreign currency. From the analysis and periodization of the flows and stocks of the Balance of Payments between 2011 and 2015, this chapter argues that a “new reality” of the Brazilian external liabilities allowed for lasting current account deficits at high levels, even in the context of worsening international scenario. Secondly, it states that the global economy played an important role in the deceleration of the Brazilian economy after 2011, but this operated mainly through indirect channels, related to the financial and productive structural linkages of the Brazilian economy to the international cycles.