The downgrading of Standard and Poor's can be considered the final blow to Brazil which, after having been one of the tigers of development in recent years, is now collecting only troubles: recession, devaluation and corruption.
According to the latest surveys, the Brazilian GDP will settle in 2015 in clearly negative territory (-2%) while inflation, due to the devaluation of the Real, has already risen to 9%.
But is the Brazilian one a meltdown or a crisis? the macro data would seem to favor the first of the two options, in reality the austerity measures of the government of Dilma Rousseff and the moves by the Brazilian central bank seem to bear fruit if it is true that the trend was interrupted in the first half of 2015 negative external accounts and following the devaluation of the national currency, the country's competitiveness is growing.
Three are the triggers of the Brazilian crisis:
– the collapse in the prices of raw materials of which Brazil has always been a major exporter
– China's slowdown
– the end of QE and the imminent rate hike by the Fed which will lead to a strengthening of the dollar against the currencies of emerging countries and in this case the Real.
In addition to the recession and the devaluation of the real which has lost 30% against the dollar in the last six months, Brazil is experiencing one of its darkest moments also following the political crisis and corruption that affected President Dilma Rousseff herself at the beginning of his second electoral mandate to the point that consensus is at an all-time low. Some large Italian groups are paying the price for this situation, which have always been particularly exposed to the Brazilian market.
In this regard, Mediobanca Securities has released a report which classifies the risks, calculated in terms of revenue/ebitda ratio, of the major Italian groups: “30% for Pirelli, 20% for Telecom Italia, 10% for FCA, CNH and Sogefi, 7 % for Atlantia, 6% for Prysmian, 5% for Enel, Luxottica and Campari. Tenaris does not appear in the classification, which paid the Brazilian price heavily on the Stock Exchange, because it is a holdin which, despite being very busy in Brazil, is based in Luxembourg and not in Italy.
