One in four Brazilians is stuck at very high credit card interest rates

One in four Brazilians who made purchases on the credit card in February 2019 entered the revolving credit and started to pay very high interest rates. The average interest rates charged by credit card companies in Brazil in February 2019 were around scary 286.9% per year, according to a survey conducted by SPC Brazil (Credit Protection Service) and CNDL (National Confederation of Directors Shopkeepers).

Most of the credit expenditures in Brazil in February 2019 were food (66%), medicines (46%), clothing (36%) and fuel (35%).

Charging interest of 286.9% a year for those who bought things like medicines and food is producing a multitude of citizens in debt in Brazil. In 2018, 62.6 million Brazilians reached the end of the year with some backlog, which represents 41% of the country's adult population. Meanwhile, Brazilian banks charge the highest spreads in the civilized world and cut credit lines.

In a country where the population outside the workforce has reached the frightening number of 65.7 million people, it is understandable to understand that a person who is unemployed and can not get a less expensive line of credit ends up falling on the revolving credit and becoming a prisoner of unpayable debts on the credit card.

The continued rise in unemployment also increases the level of population indebtedness, but the government does nothing at all. In a picture like the current one, there are those in Brazil who defend a ceiling on the value of interest on purchases of basic necessities such as medicines and food.

According to Ibope, 35% of Brazilian voters approve Jair Bolsonaro's government

A survey by Ibope indicated that the approval of Jair Bolsonaro's government is about one-third of the electorate. According to the institute, the current government approval is at 35%. 

The last such survey by Ibope in December 2018 indicated that 64% of Brazilians voters thought that Bolsonaro's government would be good or great. Now, 45% of Brazilians voters believe that Bolsonaro's government is good or great.

The survey of Ibope was made between April 12 and 15 and heard 2,000 people in 126 municipalities. This is the first survey commissioned by CNI since Bolsonaro took office.

Brazil cuts 43,196 jobs at the formal labor market in March

According to information from the Caged (General Register of Employees and Unemployed) disclosed today by the Special Secretariat of Social Security and Labor of the Ministry of Economy, Brazil closed 43,196 job vacancies with a formal contract in March. This is the worst result for the month of March since 2017 when 63,624 jobs were closed. In March 2018, Brazil had created 56,151 jobs with a formal contract. The worst results were registered in the areas of commerce (-28.803), agriculture (-9.545), and construction (-7.781).

Today, after the vote on the Pension Reform in the Constitution and Justice Commission (CCJ) of the Chamber of Deputies, approved yesterday after 62 days of debates, six times more time for the approval of the Pension Reform project presented previously by the government of Michel Temer (which was not approved).

This difference to overcome a stage that virtually all analysts consider very simple indicate that perhaps the government, because of its disorganization in political articulation, will have difficulties approving the Pension Reform.

The union of the negative numbers of Caged and the difficulty of the government to approve the Pension Reform does not create a favorable horizon. Because of this climate of doubt and uncertainty, the financial market in Brazil will continue to fluctuate.

Brazil sells 10 million bags of coffee in the first quarter of 2019

Brazil sold 10 million 60kg bags of coffee in the first quarter of 2019. The United States and Germany are the largest importers of Brazilian coffee. In the first quarter of 2019, the US imported 18.2% of the 10 million 60kg bags of coffee exported by Brazil in the first quarter of 2019. Germany was responsible for the purchase of 17.2% of the total of 10 million 60kg bags.

Italy, Japan, Belgium, Turkey, UK, Russia, and France are other major buyers of Brazilian coffee. However, China was where Brazilian coffee exports grew the most. The advance of coffee drinking in place of tea, especially among the younger population, is making China the newest promising market for Brazilian grain exports. In 2018, sales of green coffee from Brazil to China more than doubled.

This is a problem now because Jair Bolsonaro talked tough on China during his presidential campaign. For him, China, the largest trading partner of Brazil, acts as a predator, not a partner. This could greatly undermine the growth in commodity sales such as coffee, soybeans and iron ore to the Chinese. If the current government does not create a climate of commercial war with China, which would be very damaging to the Brazilian economy, coffee exports should continue to grow.

Brazilian coffee exports grew by 15% in 2018. Many experts believe that Brazilian coffee exports should continue to grow in 2019.

Income inequality rises in Brazil

Brazilian racial democracy is a myth when the issue is the economic development of its citizens. A study by the Institute for Applied Economic Research (Ipea) indicated that gains in skin color have grown over the past five years. In 2012, whites received an average of  R$ 726.93 more than blacks. In 2017, the difference increased to R$ 767.84.

In 2017, whites had an average income of R $ 1,780.60, while blacks had an average monthly income of R $ 1,012.76. So much lower than the white population.

Another very serious problem pointed out by the research are the wage differences between men and women. Although this disparity has reduced in recent years, Brazilian women, despite being more educated than men, have lower income. Brazilian women’s average income in 2012 was USD $250/month while Brazilian men’s was USD $461/month (Ipea, 2017).

Brazil increasingly needs entrepreneurial policies focused on diversity, since public policies have been derisory near the social problem that exists. However, the current government was elected with a platform aimed at ending what President Jair Bolsonaro calls "gender ideology" in Brazilian schools.

However, educational scholars argue that the educational approach to gender identity in schools can contribute to combating problems such as teenage pregnancy, violence against women, homophobia and gender inequalities.

Brazil walks to another lost year

The uncertainties and increasing risks related to Jair Bolsonaro's government's ability to send reforms to the National Congress and to implement its economic policy undermine confidence and undermine investments in Brazil.

The very weak picture of the Brazilian labor market indicates that companies have no intention of producing more or investing. The high levels of unemployment and the low quality of jobs offered reflect an almost stagnant environment. This hinders the acceleration of consumption, which will lead the country to another year of growth of around 1%.

According to the World Bank, 14 million Brazilians are at risk of returning to poverty. One of the main problems is that the Brazilian labor market is not absorbing the young. These unemployed young people are not served by any social program and also do not have access to unemployment insurance, as most are looking for their first job.

Meanwhile, the Brazilian government has been held hostage by the Pension Reform, so far its only subject and only measure in the macroeconomic area. Moreover, the government's actions are aimed at small microeconomic changes, which are not enough to change the almost stagnant picture of the Brazilian economy.

Brazil loses placement of seventh largest economy on the planet to Indonesia

Brazil is no longer the world's 7th largest economy. According to the IMF, the Brazilian share of world goods and services production, which was 4.4% in 1980, reached 2.5% last year, the lowest rate ever since. The data refer to the share of global GDP in purchasing-adjusted dollars, which reflects differences in the cost of living between countries. As a result, in 2018, Brazil lost the position of the seventh largest economy in the world, which it had held since 2005, to Indonesia. The difference is that Indonesia's GDP has grown above 5% a year since the Asian crisis of 1998.

The figures indicate that Brazil's relevance to the global economy declines considerably after six years of the economic crisis that began under Dilma Rousseff's government, passed by Michel Temer's government and is now under the administration of Jair Bolsonaro. The Brazilian economy is practically stagnant compared to growth of 1.2% in the last two years and the growth forecasts for 2019 are getting smaller. It is undeniable that the last three governments, the last Brazilian governments (Dilma, Temer, and Bolsonaro), have committed many misconceptions when directing the country's macroeconomic policies.

According to Laura Carvalho, an economist, and professor at University of São Paulo (USP), Brazilian governments should collect more taxes from the rich and make investments in innovation and services go hand in hand. For her, the recessive adjustments proposed by the current government will continue amid the scrapping of physical and social infrastructure.

For the economist, Nelson Marconi, of the Getulio Vargas Foundation (FGV), the fiscal adjustment is the big issue of the Brazilian economy. According to him, the proposed Pension Reform of the government of Jair Bolsonaro will worsen the living conditions of those who need it the most because it does not fight the privileges and reaches mainly low-income workers.

Toyota announces first hybrid flex-fuel car production in Brazil

The new hybrid and Flex-powered Corolla will be produced at Toyota's factory in Indaiatuba, in the interior of the state of São Paulo, Brazil.

The model will be the first hybrid and flex-fuel car on the planet. According to the Japanese automaker, the new car will be "the cleanest hybrid in the world" because it will be able to run on ethanol. However, the company has not yet disclosed what the emission levels of the car will be when it is running on ethanol.

According to Toyota do Brasil, the flex hybrid, when fueled with ethanol, will have one of the highest potential CO2 emission reductions.

The new sedan will be bigger than the current one. It will have 2.70 meters of inter-axle distance, 4.64 meters long, 1.78 meters wide and 1.43 meters high.

Investors fear lack of political articulation of the Bolsonaro government

Jair Bolsonaro was never a liberal. During the more than two decades in which he has been a federal deputy in Brazil, his political performance has always been close to interventionist policies.

There is an evident difficulty of the president in defending the liberal agenda of the minister Paulo Guedes. To make matters worse, it is also very evident that the current president does not believe much of this agenda. For this reason, Bolsonaro defends little or almost nothing the agenda of its own government.

The CCJ stage in the Pension Reform, which was seen as something easy, ended up becoming very difficult for a disjointed government.
This has helped to worsen many of the country's growth projections. The government's ability to implement the reforms advocated during the campaign produced dismay among Brazilian and foreign investors.

The deterioration of the Brazilian economy will make even more difficult the life of a government that until now has been completely disarticulated in the political plane.

This picture produced a lot of reluctance from foreign investors to bet on Brazil, especially after it became clear the Brazilian government will not be able to produce the liberal shock that the market expected. As a result, Brazil will be experiencing continued volatility in the coming days.

Brazilian Congress does not advance in Pension Reform and Financial Market reacts badly

The Social Security reform ended up in the CCJ (Commission of Constitution and Justice) of the Chamber of Deputies. The draftsman of the text of the Pension Reform, Deputy Marcelo Freitas, did not appear in the session.

CCJ president Felipe Francischini, also from the party of the government of Jair Bolsonaro, the PSL, said that Freitas was at a meeting on the text of the Pension Reform, so he had failed. Nevertheless, Freitas had confirmed his presence in the session and, therefore, did not need to have a physical presence. Opposition MPs did not accept Francischini's response and went to the presiding board to pressure him. The session then became a big bustle and ended up being closed.

Freitas, who is from the government party, simply did not appear in Congress. This led to voting in the CCJ for after Easter.

That made the Ibovespa index, the main stock index of the country, to fall at the end of the day. Ibovespa fell 2% after a Social Security vote was postponed at CCJ. The dollar rose 1% and surpassed the R$ 3.94.

The minimum wage in Brazil will not increase above inflation in 2020, which has not happened for 15 years

According to the draft budget presented by the government of Jair Bolsonaro for the year 2020, the minimum wage should be R$ 1,040, only with the replacement of inflation. The project also does not predict real increase for servers, only the military will have increased above inflation.

If approved, the adjustment begins in January 2020, with payment starting in February 2020.

Thus, Bolsonaro interrupts a public policy of real increase of the minimum wage that it has begun 15 years ago, and that aimed at reducing the social inequalities of the country.

Brazil is one of the most unequal countries on the planet. Almost 30% of Brazil's income is in the hands of only 1% of the country's inhabitants.

According to Oxfam, 86% of Brazilians believe that the country's backwardness is related to the gigantic economic inequality between rich and poor.

Former Peruvian President Alan Garcia dies after shooting himself before receiving an arrest warrant linked to the Odebrecht case

Alan García was accused of receiving bribes in a case involving the corruption plot of the Brazilian construction company Odebrech. The Peruvian politician shot himself in the head the knowledge that he would be arrested preliminarily by the justice of his country.

In February 2019, the Brazilian company told the US Justice Department that it would have spent US$ 29 million on corruption in the country.

Garcia had unsuccessfully tried to seek asylum from Uruguay on November 2019. However, the Uruguayan president Tabaré Vázquez refused to accept it.

Most Brazilians are against the Pension Reform proposed by Bolsonaro's government

A survey conducted by the Datafolha Institute indicates that 51% of Brazilians are against pension reform proposed by the government of Jair Bolsonaro. The survey was conducted by Datafolha between April 2 and 3.

For most Brazilian economists, the Pension Reform is urgent and must be done. However, the population fears that the poorer classes will again be the most disadvantaged. The population knows that the Pension and Social Security systems yield deficits are caused by the enormous privileges of politicians, some public servants (judges, prosecutors, and procurators) and the military, who receive very high pensions by Brazilian standards.

President Jair Bolsonaro, for example, started receiving, at the age of 33, retirement as retired captain of the Brazilian Army. Bolsonaro, who is now 64 years old, has been receiving the retirement of Exércio for more than 30 years (according to data from the Brazilian Army, the salary of captain in 2018 was R $ 8,517.00). In January 2019, Bolsonaro became eligible to retire also by the former Congressional Pensioners Institute (IPC), being able to receive from the Chamber a further R$ 29,301.45 per month. Meanwhile, an urban worker from the private sector (who retires by the age criterion: 65 for men and 60 for women) receives monthly R$ 1,129.31, which corresponds to about 290 dollars. In Brazil, the average retirement of a federal deputy is 23 times higher than that of ordinary workers.

There are even more absurd cases like those of military daughters who receive pensions practically throughout their entire lives. Only these cases cost Brazilian public coffers about R$ 5 billion per year. Most of these 110,000 women are fit to work. Some work in private companies and thus have two sources of income. However, the military daughters enjoy a lifetime pension inherited from their father, even though they have a job. Many of them marry but do not officialize the marriage so as not to lose the pension. These "single" women receive on an average monthly payment of about 6,000 reais in a country where two-thirds of the Brazilian workers retire with six times less.

Since 2000 it is no longer possible for the military to bequeath the benefit to their unmarried daughters. Even with this extinct benefit, however, Brazil will continue to disburse around 5 billion reais per year until 2060 for the daughters of the military who already receive this pension.

Therefore, besides being an economically unsustainable social security system, generating innumerable and grotesque inequalities, there is enormous difficulty and even lack of will to combat these inequalities. Mainly because the political class, responsible for Pension Reform, is one of the most benefited by the current framework. As a result, it becomes very difficult to believe that politicians will produce reform that promotes social justice and reduces current disparities.

Brazilian GDP may have negative results in the first quarter of 2019

Several Brazilian banks reduced their forecasts for the Brazilian GDP growth in the first quarter of 2019. In recent days, Itaú has reduced its expectation of 2% growth of Brazilian GDP in 2019 to 1.3%. Safra bank lowered its forecast from 2% to 1.5%. Bradesco, which projected a growth of 2.4% in GDP growth in Brazil in 2019, changed its expectation to 1.9%.

The worst projection was due to Banco Fator, which had forecast a growth of 1.7% of the Brazilian GDP in 2019. Now, Banco Fator understands that Brazilian GDP growth should be at 1.3% in 2019. The Factor also pointed out that the first quarter of 2019 should be marked by a decrease of 0.7% in GDP.

Because of these reductions, there is, therefore, a large decrease in bets favorable in relation to Brazil between domestic and foreign investors.

The current uncertainties in the political scenario and the reform agenda certainly greatly delay economic growth because it greatly reduces growth expectations for the Brazilian economy. However, this is the third consecutive year in which market expectations are reduced considerably. This points to a recurring error in the analyses made by economists in relation to the Brazilian political structure.

The financial market players erred in analyzing the Temer government and now erred again in expecting Jair Bolsonaro's presidency a minimally organized government. So far, what has been seen was a lot of confusion, unpreparedness and a tendency to give up the liberal agenda against any pressure, as occurred in the case of Petrobras.

According to Reuters, "although Bolsonaro vowed orthodox economic policies in his far-right presidential campaign last year, his first 100 days in office have raised concerns that more populist factions in his government may have an upper hand over free-market voices".

This shows a huge gap between market analysis and expectations and the real capacity for reform and to carry out economic policies that Brazilian politicians have.

Brazilian farmers are exempt from paying R$ 40 billion in taxes

The Tax on Circulation of Goods and Services (ICMS) will not be charged to farmers by the Brazilian state governments. The measure will help contain the rise in food prices, but it will also cost about R$40 billion reais to the public safes.

The problem is that many state governments are broken. The worst cases are  Rio de Janeiro, the Rio Grande do Sul, Minas Gerais, Roraima, Rio Grande do Norte, and Mato Grosso, which have already declared a state of public calamity in the financial sphere.

Therefore, on the one hand, the measure that helps farmers and secure food prices in the short term will make even worse the financial situation of states facing a calamity situation in the public accounts in the long run.

Bolsonaro's government decides to interfere in fuel prices

Petrobras had announced that the average liter value of the fuel would rise 5.74% from today. However, the government of President Jair Bolsonaro, who until then claimed to be liberal in the economy, prohibited that the increase was applied.

The government fears a new strike by truck drivers like the one that stopped the country in 2018.

According to analysts, this measure hinders the work of reduction of debt and sale of assets made by Petrobras in recent years. The interference, very similar to the one made by the Dilma Rousseff government, can greatly harm the health of Petrobras. Petrobras' stock prices are expected to reflect this interference negatively. This should also drive the performance of the financial market in Brazil today and in the coming days.

In addition, the government also waved at the possibility of creating a tax on all financial transactions in Brazil. This should also be not welcomed with many criticisms of the Brazilian financial market.

The promise to reduce taxes made during the campaign of Jair Bolsonaro to the presidency generated many expectations in the Brazilian financial market. If the new tax is presented by the current government, the tendency is for the Brazilian financial market to take a more critical stance on the government.

Brazilian banks have the highest profit in history

Profits of Brazilian banks grew by 17.40% between 2017 and 2018. This was pointed out by the Brazil Central Bank's Director of Inspection, Paulo Souza. According to him, the net profit recorded by banks in Brazil at the end of 2018 was R$ 98.5 billion.

According to the banks, the factors that contributed to this result are the reduction of defaults and administrative expenses. The profits of the country's four largest banks (Banco do Brasil, Bradesco, Itaú Unibanco, and Santander) were R$ 69 billion in 2018. This represents a 20% increase compared to 2017.

This exceptional performance contrasts with a country where the majority faces a framework 63 million people unable to clear their names and regain their credit, where 13 million are unemployed and more than 30 million work in informality.

It is very difficult to understand how a country with stagnant economic performance, industry hitting negative records, falling per capita income, rising poverty levels may have a sector with so much profitability.

For some economists, these results are a direct result of the banking oligopoly that exists today in Brazil. This oligopoly guarantees extravagant profits. If Brazil had a more competitive banking system, the fees charged by banks would be lower, the services would be better and profits would not be so exorbitant.

According to economist Eduardo Moreira, the five largest single-rate banks charge more than R$ 130 billion of their clients every year. To get an idea of the size of this amount, the entire health budget in Brazil is R$ 120 billion per year. For him, the banks' performance is a machine of the concentration of wealth and abusive collections of interest and taxes on the middle class and the poor Brazilians.

Articulation of the Brazilian government will determine the behavior of the Brazilian financial market in the coming days

The first three months of the government still produces some optimism among some agents of the Brazilian financial market.

The lull in the international financial market, with Central Banks acting and China and US relation showing a more positive picture, helps maintain a certain optimism among Brazilian investors.

The Brazilian government began to move more to approve the Pension Reform. However, the government has not yet been able to consolidate an allied base for approval of its projects.

It all depends on the Brazilian government's ability to do politics. However, it appears that there is no such bargaining power in government.

There is also the danger that Bolsonaro or his sons may again publicly quarrel with some important political actor, as happened weeks ago the quarrel between the President of the Republic, Jair Bolsonaro, and the president of the Brazilian National Congress, Rodrigo Maia.

Cost of living in Brazil: inflation accelerates

Brazil's Broad Consumer Price Index (IPCA) rose from 0.43% to 0.75% between February and March 2019, according to IBGE data. This is the 4th consecutive high of inflation and the highest index for March since 2015.

Therefore, the IPCA closed the month of March with a rise of 0.75%, which is above the top of the market estimates, which were between 0.50% and 0.70%.

As a result, the IPCA accumulated in 12 months jumps from 3.89% (well below the target of 4.25% to 4.58% (well above the target)

The item that had the highest growth was gasoline, which rose 2.99% and accounted for 0.12 percentage points of the inflation indicator.

Tomato and bean prices were the highest among food items. The tomato increased by 31.84% in the monthly comparison. Beans racked up 105 percent of the growth in its prices in the first quarter.

Paulo Guedes, Brazil's Economy Minister, promises to halve the price of gas

During a meeting of mayors nationwide, held yesterday in Brasilia, the Brazilian capital, Economy Minister Paulo Guedes promised that the current government will implement a plan called "cheap energy shock." According to him, by ending Petrobras' monopoly in this sector and encouraging competition, the price of gas will be halved.

At the same meeting, Guedes said he will reduce the number of taxes in the country and create a Single Federal Tax.

According to the National Union of Liquefied Petroleum Gas Distributors (Sindigas), six companies account for almost 90% of the distribution market in Brazil. In the previous management of Petrobras, during the Michel Temer government, the sale of 90% of the shares of Nova Transportadora do Sudeste (NTS) and the sale of 49% of the subsidiary Gaspetro was completed.

Currently, Petrobras is responsible as a concessionaire for 75% of the gas produced and for 96% as an operator.

Brazil currently consumes about 100 million cubic meters of natural gas per day, only 4% of households in the country use piped gas. The other 96% is divided between wood stoves, gas canisters and other alternatives.

Brazilian Stock Exchange (Bovespa) have the largest fall of the last two weeks

The Ibovespa, index that measures the price variation of the main shares traded on the Bovespa dropped 1.11% yesterday, April 3, 2019. The market saw with pessimism the statement of Economy Minister Paulo Guedes, who said that he will not assume the position of articulator of the Pension Reform in the Brazilian National Congress.

Also yesterday, the IMF reduced Brazil's GDP forecast in 2019. According to the IMF's World Economic Outlook report, Brazil's GDP growth forecast is now 2.1% in 2019. The forecast made in January 2019 by the same IMF was that the Brazilian GDP would grow around 2.5% this year.

In the Bolsonaro administration, there is no economic development plan for the country. Economy Minister Paulo Guedes believes growth will only come after the approval of the Pension Reform. However, several Brazilian economists like Nelson Marconi and Paulo Feldmann believe that the government should adopt other measures, in addition to the Pension Reform, to combat unemployment in the country.

The same IMF report pointed out that Venezuela's GDP fell by 18% in 2018 and should fall 25% in 2019. As a result of these declines, Venezuela's economy in 2020 will be almost half of what it was in 2017.

The inflation forecast by the IMF for Argentina in 2019 is 43.7%. Because of this, the IMF decided to release a US $ 10.8 billion pass-through to the Macri government, which was unable to resolve the economic crisis and faced a decline in its popularity. Over the past six months, some 2.7 million Argentines fell under the category of poor and destitute. In total, there are already 12.9 million poor and indigent people in the country with just over 44 million inhabitants.

Projection of the Brazilian GDP falls for the 6th consecutive time

According to the Focus bulletin published by the Brazilian Central Bank, for the 6th consecutive week, a survey conducted by the institution with market analysts consulted reduced the growth projection of the Brazilian economy. According to the Focus bulletin, the country's Gross Domestic Product (GDP) is expected to advance 1.97% in 2019.

However, there are analysts in Brazil working with estimates below that number, around 1.5%. The slow pace of economic recovery and instability in the political environment have led to declining expectations.

Due to these prognoses, the Government of Brazil announced the blocking of R $ 29.79 billion in this year's Budget. One of the most significant decreases was in the area of Agriculture. The growth projection fell from 2% to 1%. For the industry sector, the expectation of growth for the year 2019 went from 2.9% to 1.8%.

Abraham Weintraub is the new Minister of Education of Brazil

After numerous confusions and the complete paralysis of the Ministry of Education, President Jair Bolsonaro fired the Minister of Education Ricardo Vélez.

The dismissal of Vélez Rodríguez is the second drop in the government ministry Jair Bolsonaro in less than 100 days of this administration. Secretary-General Gustavo Bebianno was fired after a controversy with Bolsonaro's son, Carlos.

The new Minister of Education, Abraham Weintraub is an economist and has worked in the financial market for more than 20 years.

The confusion was so great that in the last 3 months, at least 12 people in important positions left the Ministry of Education. Some of them had not even been replaced, leaving important areas of Brazilian education completely destitute and without command. In 2019, the Ministry of Education will administer a total of R$ 122 billion.

Decreases optimism with the Brazilian economy after 100 days of Bolsonaro's government

A Datafolha survey, released today (May 8, 2019), indicates that the Brazilian population optimism about the economy fell from 65% in December 2018 to 50% in April 2019.

Because of this, the financial market begins opens a quieter week in Brazil after the beginning of a larger dialogue between President Jair Bolsonaro and the National Congress.

Until now, the first 100 days of the Bolsonaro administration were a major mess. This picture spread to the financial market, which initially had a very positive expectation of the new government.

Several investors reviewed their positions and the Stock Exchange saw the dollar reach the price of $ 4.00 last week.

This week, the financial market and risky assets start in much less optimistic expectation. There is much more caution today for buying, for example, the kit Brazil.

The number of indebted and defaulting Brazilian families grows

According to a survey conducted by Brazil's National Confederation of Trade in Goods, Services, and Tourism (CNC), the number of indebted Brazilian families rose from 61.5% to 62.4% between February and March 2019. In the same period, the number of default of families grew from 23.1% to 23.4%. This is the highest level since 2015 according to the CNC.

The credit card was the main source of debt for 78.0% of indebted households, followed by bills (14.4%) and car financing (10.0%).

In Brazil, the interest rate charged by the credit card is among one of the highest in the world. In February of 2019, according to the Central Bank of Brazil, the revolving credit card interest stood at 295.5% per year.

Jair Bolsonaro has worse evaluation among presidents of first mandate since the democratization

According to the Datafolha research institute, 30% of Brazilians consider the Bolsonaro government bad, a rate similar to those who considered the government good (32%) or regular (33%).

In 100 days of rule, Bolsonaro's approval fell from the 49 percent expected to be a good government, from January's Ibope poll to the current 32 percent who think his government is a good government according to Datafolha.

According to analysts like Vinicius Torres Freire, the "frustrations of 2019 could lead the country to the fatigue of an economic adjustment that has not yet occurred."

Added to this, according to FT, is the fact that China started to boost purchases of US agricultural products, including 1.7 million tons of soy and 178 thousand bales of cotton that were previously imported from Brazil.

In recent years, agribusiness exports have ensured surpluses in the trade balance.

During the presidential campaign, Bolsonaro portrayed China, Brazil's largest trading partner, as a "predator who seeks to dominate key sectors of the Brazilian economy." The speech of the then-candidate was very badly received by the Chinese government.

German company leads the truck market in Brazil in 2019

Volkswagen Trucks and Buses (VWCO, in the acronym in Portuguese) led the truck sales in four of the five segments analyzed by the Brazilian National Association of Trucks, and Automotive Vehicle Manufacturers (Anfavea), in February 2019.

In the accumulated of the year, three of the five most sold trucks in the Brazilian market are from Volkswagen.

This leadership is a direct result of Volkswagen Trucks and Buses' decision to invest R$ 1.5 billion between 2017 and 2021 at the Resende plant in Rio de Janeiro. Currently, the Resende plant employs about three thousand employees and is the company's worldwide production and development center for trucks.

Brazilian government changes rules on purchases and sales of government bonds

A decision by the Brazilian Government reduced the difference between the investment rate and the redemption rate to 0.01% per year. The intention is to end the handicap in the short term of Tesouro Selic.

Previously, the difference between the investment rate and the redemption rate was 0.04%. The measure, announced on April 5, aims to end the fact that, in the short term, buying and selling government securities (Tesouro Selic or Tesouro Direto) yielded less than savings.

In Brazil, the Tesouro Selic is remunerated by the basic interest rate, the Selic, which currently stands at 6.5% per year. Savings yields 70% of the Selic, equivalent to 4.55% per year.

Multimarket funds lose money with tumultuous scenario of Brazilian politics

The constant crises and lack of political skill of Jair Bolsonaro's government led the Brazilian Financial Market to re-evaluate and recalculate the risks of the current administration.

A study made by SmartBrain on Brazilian multimarket funds, covering the period of the new government, indicated that multimarket funds began the year very optimistic with a possible liberal policy and reduction of the state sold during the political campaign by then-candidate Jair Bolsonaro.

The oscillation and the altercations between the Executive Power and the Legislative Power in Brazil led the funds to lose money. Only 28% of the funds had positive returns in the first months of the Bolsonaro administration.

As nothing indicates any change in the directions of inflation and as promises and expectations about the new government did not occur, the funds that stood for economic growth ended up losing money.

A turmoil in the political scene made the funds change to dólar. Therefore, the funds that were betting on the "kit Brazil" (appreciation of the Brazilian currency, investment in the Stock Exchange and the fall of the Brazilian interest rate) lost money.

The number of poor people in Brazil grows

According to the World Bank, the crisis that hit Brazil between 2014 and 2017 increased from 17.9% to 21% the percentage of Brazilians living with less than US$ 5.50 per day.

In addition, the poor economic performance of Brazil, Argentina, and Mexico, coupled with the very serious situation in Venezuela, led the World Bank to revise its expectation of Latin American economic growth in 2019 to 0.9%.

In Brazil, the picture of increasing misery pointed out by the World Bank is compounded by high unemployment rates.

A survey by the Center for Management and Strategic Studies (CGEE) of the Brazilian Ministry of Science, Technology, Innovation, and Communications pointed out that the number of Brazilians with unemployed PhDs reaches 25%. In the world, the unemployment rate of this group is around 2%. In Brazil, the unemployment rate among people with a master's degree reaches 35%.

In the semester closed in February 2019, unemployment in Brazil stood at 13.1%, according to data released by the Brazilian Institute of Geography and Statistics (IBGE). With 27.9 million underutilized workers, the underutilization of the workforce has reached a record in the IBGE's history series.

Paulo Guedes, Brazilian Minister of the Economy, denies requests from automakers and maintains free trade in auto parts with Mexico

Brazil is one of the largest car producers in the world. In February 2019, the country produced 257.2 thousand cars light commercial vehicles, trucks, and buses, accumulating a growth of 5.3% in the first two months of the year, reaching 455.3 thousand units.

Paradoxically, car prices in Brazil are among the highest in the world. In some cases, there are cars that cost more than 100% than in other countries. Among the main reasons for such prices are the very high-profit margins of resellers, taxes and infrastructure problems in the country.

The current Minister of Economy of Brazil believes that some of these problems can be solved with more economic openness.

Last March 29, in a meeting with representatives of the country's three largest automakers (General Motors, Fiat and Volkswagen), Guedes said he would not reestablish the quota system that regulated the automotive trade between Brazil and Mexico, believing that it was time for the country to open its economy.

The representatives of the automakers were criticized by government officials during the meeting, who would have said that the automakers had received R$ 20 billion in subsidies in the last five years. Since March 19, cars and auto parts circulate between Brazil and Mexico without import tariff. Now, the two countries will be able to export and import those products without any barriers.

The Brazilian sectors of Foundries, Auto parts and Assemblers will face a real "competition shock", since these sectors in Mexico are among the most competitive in the world. Therefore, there is a fear on the part of the Brazilian automakers that the parent companies prefer to invest in Mexico instead of Brazil.

In February 2019, Ford announced the closure of its São Bernardo plant in the state of São Paulo, where 3,000 people work, and the company's exit from the South American truck market. Thus, the company's North American headquarters decided to close its subsidiary in São Bernardo.

Speech of Brazilian Economy Minister in Congress overturns Stock Market

The Ibovespa, the main index of the Brazilian Stock Exchange, ended the day falling 0.94%, to 94,491.48 points. This is the lowest level in a week.

This change in the behavior of the Financial Market was a fruit of the defense of the Pension Reform, in the Chamber of Deputies, made by the Minister of Economy, Paulo Guedes.

The minister, who had already discussed harshly with Senator Kátia Abreu during his defense of the Pension Reform in the Brazilian Senate last week, was again criticized by the opposition for not presenting figures and studies to defend the Pension Reform today.

Due to this performance and the uncertainties that it generated, the dollar returned to increase by 0.54% and closed the day with the quotation of R$ 3.8790.

Brazil falls in ranking of WTO exporters

The annual report of the World Trade Organization (WTO) indicated that Brazil has fallen from 26th to 27th in the ranking of the world's largest exporters.

The report was released yesterday. According to the Ministry of Economy of Brazil, in 2018, Brazilian exports totaled US$ 239.523 billion. In 2017 this number was US$ 217.739 billion.

Brazil was overtaken by Vietnam, which became the 26th largest exporter on the planet.

In general, commodities continue to hold the balance of Brazilian exports. The leader of the WTO ranking in 2018 was China, followed by the United States (2nd place) and Germany (3rd place).

In 2018, Brazil also fell in the ranking of world competitiveness made by the World Economic Forum. The country was in 72nd position, behind nations like Armenia, Bulgaria, and Romania. In 2017, the Brazilian economy was the 69th most competitive in the world according to the same ranking.

The surplus of the Brazilian trade balance falls in March

The surplus of the Brazilian trade balance dropped from US$ 6.24 billion in March 2017 to US$ 4.99 billion in March 2019. This is the worst result for the month of March since 2016.

This drop of 22.3% is linked to the crisis in Argentina, Brazil's main trading partner in South America and a major buyer of Brazilian manufactured goods.

Some of the Brazilian products hit hardest by the fall in March are cargo vehicles (68.2%), passenger cars (41.4%) and auto parts (31.4%).

The Brazilian surplus of March 2019 is a result of US $ 18.120 billion in exports and US$ 13.130 billion in imports.

The product most exported by Brazil in the period was raw cotton, which had a 123.6% increase in exports.

The number of defaulted companies in Brazil grows

The number of companies in Brazil with debt increased by 5.02% in February 2019, compared to the same month last year.

The survey was carried out by the National Confederation of Shopkeepers (Confederação Nacional de Dirigentes Lojistas - CNDL) and the Credit Protection Service (Serviço de Proteção ao Crédito - SPC).

Banks and financial companies hold about 70% of the total debt. Therefore, this sector was the segment that most failed to receive from other companies.

Each indebted company has, on average, two accumulated financial arrears.

Default, without prior notice, reduces the ability to pay, directly affects cash flow, can cause losses for companies and can lead to bankruptcy.

This problem also affects the population. In 2018, more than 62 million Brazilians ended the year indebted. This represented an increase of 4.4% compared to 2017.

Brazil's GDP growth to be the lowest in 120 years

A projection by the Instituto Brasileiro de Economia (Brazilian Institute of Economics) of the Fundação Getúlio Vargas (Ibre/FGV) indicates that the average growth of the Brazilian economy should be only 0.9% per year between 2011 and 2020. If everything continues as it is, will have its weakest performance in 120 years.

According to Ibre/FGV analysis, the weak performance of the economy reflects the successive deficits in public accounts since 2014 and two consecutive years of recession in 2015 and 2016.

This rate is lower than the 1.6% of the so-called 'lost decade' in the 1980s when the Brazilian government declared a moratorium and suspended the payment of international creditors.

In 2015 Brazil's GDP fell by 3.5%. By 2016, the fall in GDP was 3.3%.

According to the Ibre/FGV researcher, Marcel Balassiano, the country would have to grow around 5.7% in 2019 and 2020 for this decade also not be considered a lost decade.

Overall, Brazil's economic recovery has been slow, the industry is struggling to catch up, and the Brazilian state is headed for a few more years of fiscal deficits.