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4 Brazil Stocks to Buy on an Improving Economy

Till recently, the only bright spot for Brazil seems to be the successful conclusion of the Rio Olympic Games. A tough win in the national favorite, football and an unprecedented victory in the pole vault contest gladdened the heart of international spectators and citizens alike. The country’s economy may not be in a position to perform similar feats, but things have improved considerably in recent times.

Signs are already evident that the economy is getting its act together. Several economic indicators are improving even as prospects for select emerging markets, such as Brazil, improve. At this point, picking stocks from Brazil may make for a smart investment choice and involve a lower degree of risk than before.

Economy Turns Over New Leaf

To be fair, doubts over the state of Brazil’s economy have not disappeared completely. However, some key economic indicators have improved, giving rise to optimism about the state of things. For instance, manufacturing investment has witnessed a pickup. In June, capital goods imports increased 18% in dollar terms on a yearly basis. This is the first year-over-year increase recorded since Sep 2014.

Additionally, industrial production increased in June, marking the fourth consecutive monthly increase following two back to back years of near continual declines. Inventories of unsold goods are falling and the decline of trucks on motorways has ceased.

Political Crisis Nears Resolution

Equally important for the country is its perception as far as global investors are concerned, especially when it comes to issues like corruption in high places. While funds continue to flow in due to several global factors, the office of the country’s president has been mired in controversy for some time now. However, things are set to change now as impeachment proceedings are due to begin against former president Dilma Rousseff on Aug 25.

Even more crucial has been the...