Brazil's Age of Austerity

Brazil's Age of Austerity


As Brazil's federal government prepares for a sharp fiscal adjustment, FSG analyzes how reduced government spending and higher taxes will affect public sector sales, private demand, and business investment, and highlights pockets of opportunity to sustain top-line performance.

For companies selling to the government, resilient demand might be found in some ministries. Consumer goods companies will have to confront an environment of higher unemployment and more stringent access to credit, though both factors will vary significantly across geographies. Companies selling business inputs can expect new sales opportunities via new public tenders as the government tries to shore up its finances.

What you will learn

  • What are the challenges associated with Brazil's required fiscal adjustment
  • How government spending will evolve going forward into 2017
  • Where opportunities lie for businesses selling to the government, consumers and other businesses

Executive Summary
Section 1: Understanding Brazil's Fiscal Crisis
  Drivers of Fiscal Deterioration
  Economic Consequences of Rising Deficits
Section 2: Challenges Associated with the Required Adjustment
  Format of Ideal Fiscal Adjustment
  Size of the Needed Adjustment
  A Balanced Adjustment Should Be Pursued
  The Challenge of Spending Cuts
  Overwhelming Challenge of Pension System
  The Challenge of Tax Hikes
  Proposed Government Reform Measures
  Scenario Planning Overview
  Scenario Implications for Fiscal Policy
Section 3: Government Spending Overview & 2017 Outlook
  Structure of 2016 Spending Cuts
  General Government Spending Cuts
  Social Spending Cuts
  Proposed 2017 Adjustment is Marginal
  Possibilities For New Cuts Are Limited22-
Section 4: Impact on Business-to-Government (B2G) Sales24-
Section 5: Impact on Business-to-Consumer (B2C) Sales30-
Section 6: Impact on Business-to-Business (B2B) Sales32-
About Frontier Strategy Group

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