Brazil’s Enormous Interest Rate Tax: Can Brazilians Afford It? by Mark Weisbrot, Jake Johnston, Julia Villarruel Carrillo, and Vitor Mello published by CEPR (4/2014).
“Brazil is currently paying a very high price, in terms of its economic growth, employment, development, and social progress due to its exorbitantly high interest rates. Interest payments on the public debt for 2016 are estimated at 7.6 percent of GDP. This is the fourth-highest interest burden in the world (out of a total of 183 countries). Other countries with a similar burden, such as Yemen and Egypt, are plagued by civil conflict and other risk factors that would be expected to increase the probability of default. Brazil, by contrast, has little risk of default, and with 360 billion USD in international reserves, there is not much likelihood of balance of payments crises that could lead to runaway inflation…”
