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Investing.com - Fund managers covering Latin America are showing increased conviction on Brazil’s Ibovespa index, with 83% of respondents in Bank of America’s latest survey expecting the benchmark to exceed 140,000 points, up from 66% in the previous month’s survey.
The survey, conducted before the U.S. government announced a 50% blanket tariff on Brazilian goods, reveals that most fund managers expect Brazil to outperform Mexico over the next six months. Participants also indicated that investors will likely begin positioning for Brazil’s elections in the fourth quarter of 2025, earlier than the first half of 2026 timeframe previously anticipated.
Economic growth expectations for Brazil have moderated, with most respondents now projecting 2025 GDP growth in the 1%-2% range, down from the 2%-3% range in earlier forecasts. This slowdown aligns with Bank of America’s view of an ongoing deceleration, though the bank maintains a more optimistic 2.5% growth forecast for 2025.
The economic cooling has strengthened the case for monetary easing, with 43% of survey participants now expecting interest rate cuts before the end of this year. None of the respondents anticipate further rate hikes in Brazil.
Bank of America analysts predict the Brazilian central bank will implement a 50 basis point cut in December 2025, positioning themselves ahead of the market consensus on the timing of monetary easing.
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