Challenges of President Dilma Rousseff’s Second Term

Resumo

This paper aims at analysing the challenges that will be faced by the President of the Brazil, Dilma Rousseff, in her second term in office. We argue that the fundamental challenge to the federal government is to restore the dynamism of the manufacturing industry, which requires a significant, nevertheless gradual, real exchange rate devaluation. Thus, the necessary government budget adjustment must be focused on tax increases in the short term and on the containment of the growth pace of the government current spending.