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Brazil economy needs rebalancing

After a decade of rising wages, Brazil's new middle class may have hit a ceiling.

The country may even struggle to hang on to what they have gained in recent years as inflation erodes their increasing wages.

The outlook is difficult, and what they spend, prompted by increased credit availability in recent years, is increasingly important in an economy that's dominated by its services sector.

Ilan Goldfein, chief economist at Brazil's largest private bank, Itau, told the Today programme: "I don't think it's dangerous when you go from very low levels to normal levels.

"I think we will probably need to see some reforms. We need to consume less and invest more, I think there is a need for rebalancing."

First broadcast on the Today programme on Wednesday 17 July.