Unemployment, in April, affects 13.2 million Brazilians

According to the IBGE, the number of underutilized reached a record of 28.4 million. Total of those who gave up looking for a job also set a record and reached 4.9 million.

Unemployment in Brazil was 12.5%, on average, in the quarter ended April 2019, according to data published by IBGE (Brazilian Institute of Geography and Statistics). The index rose compared to the previous quarter, from November 2018 to January 2019 (12%). However, in comparison with the same quarter of last year (12.9%), the result was low.

According to figures released by the IBGE, after 16 consecutive quarters of a fall, employment in the private sector with a backlog increased by 1.5% in the quarter ended in April 2019, compared to the same period in 2018.

With the Brazilian economy practically at a standstill, the labor market is throwing thousands of Brazilians into informality. The employed population even increased again in April, but a slice of the workers who work in the private sector with a work permit is practically stable.

BRF announced the merger with Marfrig

The merger announced today (March 30, 2019) between BRF and Marfrig will create a company of approximately R$ 28 billion in market value and more than R$ 70 billion in annual revenue.

After the completion of the business, BRF will control approximately 85% of the company, the remaining 15% will be in charge of Marfrig.

The news stirred the Brazilian corporate sector and should be one of the highlights in the Brazilian financial market in the coming days. The combination would bring another giant to the global meat business and would bring scale to the new company.

Brazilian cities register new demonstrations against cuts in education by Bolsonaro government

Thousands of people, mainly students, and teachers from public and private schools, returned to the streets today (30.May.2019) in all regions of Brazil. This is the second major protest against the blockades in education funding promoted by the administration of President Jair Bolsonaro.

The demonstrations take place only a few days after large demonstrations in favor of the Bolsonaro government, which took place last Sunday (26.May.2019). Among Brazilian political analysts, the perception grows that the country is moving towards an ever greater political division.

Brazil, 2019: another lost year

After the IBGE announced today that Brazil's GDP fell 0.2% in the first quarter, in its first decline since 2016,  analysts are now saying the government has to take urgent steps to recover the economy, but even if all of this done the recovery of the Brazilian economy should only happen in 2020 because by 2019 the situation should not improve. Employment, for example, may get worse than in 2018.

According to José Luis Oreiro, professor of economics at the University of Brasília (UnB), "2019 is a year that we already lost. It is a year of very low growth, I think that 1% is the growth forecast ceiling for 2019 but it's going to be less than that. We can get out of this? Yes, but we (the government) have to create aggregate demand stimuli".

In the evaluation of the economist José Roberto Mendonça de Barros, founder of MB Associados, 2019 is a lost year for the economy. According to him, the current administration did not have the political ability to make the ideal Pension Reform in the early months of 2019. Now, the most optimistic prediction is that the Pension Reform should only be voted by the end of the year.

There are also economists who already speak of a "recession smell," such as Zeina Latif of XP, or that Brazil would already be in a "possible technical recession," according to Sérgio Vale of MB Associados.

Many analysts, who at the beginning of the year were betting heavily on the current government, now say that Brazil's economic momentum is very bad, that government performance is discouraging and that the economy stands at a low point and with no expectation of growth.

Brazilian GDP falls 0.2% in the first quarter of 2019

According to information published today (30.May.2019) by the Brazilian Institute of Geography and Statistics (IBGE), the GDP (Gross Domestic Product) in Brazil fell by 0.2% in the first quarter of 2019 in relation to the previous three months.

This is the first negative result of the Brazilian GDP since 2016. The figures released by the IBGE point to the risk of Brazil again suffering from the recession (when the country registers two consecutive quarters of decline in economic activity).

According to the IBGE, the rupture of the Vale dam in Brumadinho (MG), and its consequent effect on the result of the industry is among the main factors that brought down the economic activity of the country.

This landslide of Brumadinho dam of Vale occurred on January 25. 244 people died. The tragedy was a direct result of the lack of public oversight and the policy of easing environmental licensing laws, which is widely advocated by the current government of Jair Bolsonaro and his Environment Minister Ricardo Salles.

Among other things, Salles favors "self-certification." This means that the company itself will inspect its dams without the need for any prior environmental inspection by the government agencies for certain types of projects. According to Exame magazine, "not even the worst socio-environmental tragedy in Brazil, provoked by Vale in Minas Gerais, made the minister change his mind."

Now, with the possibility of a new tragedy in the Upper South dam of the Gongo Soco Mine, in Barão de Cocais, Minas Gerais, which can break at any moment, it puts the lives of the region's inhabitants at risk, it can cause another immense disaster environmental and make the Brazilian economic situation even worse.

Brazil suffers from banking concentration

Brazil has one of the highest banking concentration rates in the world. According to the Bank Economics Report of 2017, published by the Central Bank of Brazil (BCB), the five largest Brazilian banks account for 82% of the country's financial market assets. In 2006, this rate was 60%. It is what says the memo Revolução Bancária (Banking Revolution) written by Diego Gazotto December.

The Central Bank of Brazil pointed out in its Banking Economy Report that the banking concentration in the country had a slight decline in 2018, with the five largest institutions (Banco do Brasil, Itaú, Bradesco, Caixa Econômica and Santander) holding 81.2% of the assets total of the commercial banking segment, compared to 82.6% in 2017. The report also points out that this group accounted for 84.8% of credit operations in the segment, against 85.8% last year. In relation to total deposits, the fall from 85% in 2017 to 83.8% in 2018. Although all numbers have decreased, these levels of concentration are still very high.

Information from the Central Bank of Brazil also shows that, in March 2019 (last available data), interest on overdraft and credit card rose again. In the case of an overdraft, the rate was 317.9% per year in February, to 322.7% per year in March. Credit card interest rates went from 295.5% per year in February to 299.5% per year in March. They are unacceptable rates.

According to the economist Maurício Gutemberg, "Nowhere in Latin America is there an interest rate charged by credit card companies such as the Brazilian one. We can not call it interest rates here. In fact, they are rates comparable only to moneylenders but charged by banks and financial companies regulated by the Central Bank of Brazil. "

Meeting of the leaders of the three powers (executive, legislative and judicial) please the Brazilian financial market and helps to slow the dollar's rise

Today was a good day for the Brazilian financial market. Some facts pushed the Ibovespa positively.

Rodrigo Maia, the president of the Chamber of Deputies, asked Samuel Moreira, the rapporteur for the Pension Reform in Congress, to present the text of the Pension Reform proposal until June 15.
Maia wants the MPs to vote for the approval or not of the Pension Reform in the first half of 2019.

In addition, the meeting between representatives of the three Brazilian powers that took place today encouraged Brazilian investors. The representatives of the three powers have signed a pact with targets and actions for the resumption of growth in the country. The meeting was attended by President Jair Bolsonaro and the presidents of the Chamber of Deputies, Rodrigo Maia, the Senate, Davi Alcolumbre, and the Supreme Court, Dias Toffoli.

I already wrote here in this blog that the "Brazilian Financial Markets (analysts and economists) and the Brazilian businessmen bet very high on a government that was not able to respond to the height to that bet".

Now the leaders of the three powers have begun to present a beginning of political negotiation. But some political analysts believe it may already be too late for that. There are many MPs uncomfortable with the constant attacks made by Bolsonaro, his political sons and his followers on social networks.

Agreement between Mercosur and the European Union should be signed in July

According to O Globo newspaper, the expected free trade agreement between Mercosur and the European Union should be signed in July this year. The main technical points have already been closed and pending discussions include rules on drug patents and the release for the entry of European wines. Brazil would have signaled an opening in the automobile market but faces resistance to expand the advantages in agribusiness.

The Europeans want a greater opening of the Brazilian automobile market. The members of the European Union want to increase their exports in this sector. In return, they promise to consider greater access to products such as ethanol, sugar, meats and other agricultural goods, where Brazil dominates.

Brazil has the 3rd biggest drop in trade among G20 countries, according to the OECD

The total of Brazilian exports and imports in the first quarter of 2019 contracted by US$ 6.9 billion when compared to the previous quarter, according to the Organisation for Economic Co-operation and Development (OECD).

Exports in the first quarter of 2019 were US$ 58.6 billion compared to US$ 62.6 billion in the fourth quarter of 2018. Imports were US$ 42.4 billion, compared to US$ 45.2 billion in the previous quarter.

President of the Brazilian Central Bank announces structural measures to simplify the currency exchange in the country

Roberto Campos Neto, the president of the Central Bank of Brazil, said that the bank will announce, on Wednesday (29.May.2019), a bill to simplify the currency exchange in Brazil.

The idea is to create a 100% convertible currency capable of becoming a reference for the region. According to Campos Neto, there is a lot of demand for accounts in reais (the Brazilian currency) in small countries that do business in Brazil. Brazil has this vocation. If we reach maturity, with controlled inflation, low interest, we will have scope to expand the currency. But for this, it is important to have a convertible currency.

Asked by the site Poder360 if Brazil was headed towards a great depression, Campos Neto replied: "we do not work with this scenario". He thinks that this is unlikely, given the pent-up demand in Brazil. 

However, according to Bloomberg, Brazil's GDP in the first quarter should show a decline in the quarterly comparison. This decline could interrupt the series of eight consecutive quarters of advancement.

Morgan Stanley is interested in acting more in Brazil

Morgan Stanley wants to expand its business in Brazil. To this end, it is eyeing in part the structured loan market – for these transactions, the bank targets loans that can range from $ 50 million to $ 250 million. Another objective of the institution will be to bring products offered by the bank in other countries to Brazil. The strategy will also increase the participation of Brazilians in its offshore platform. Caixa Econômica Federal has also chosen Morgan Stanley as a co-advisor to select his insurance partners.

Morgan Stanley, by assuming the position of insurance partner, will be entitled to sell policies for 20 years to Caixa's 93 million customers in its network of more than 4,000 branches.

Number of formal jobs increases in April in Brazil

According to the General Register of Employed and Unemployed (Caged), the Brazilian labor market has created 129,600 formal jobs and has the best April of the last 6 years. However, before April 2019, unemployment has increased in Brazil and vacancies, when they arise, are mostly for informal, precarious and low-wage occupations.

With more than 66,000 hirings, the services sector was the main driver of this performance in April.

Caged is not research on the job market. It is a record that companies are required to provide every month to the Ministry of Economy. The numbers sent to the government, therefore, contain the total number of hirings and dismissals of Brazilian companies.

However, hiring wages for April 2019 were lower than the salaries paid to those hired in April 2018.

The industry with the greatest difficulty in recovering is the industry, where jobs with better salaries are placed. So far the current government has not presented any measure aimed at job creation. The only government agenda so far has been the Pension Reform.

The dollar value continues to grow in Brazil and end the day at R$ 4.0360

The trading session of the São Paulo Stock Exchange (Bovespa) closed with the dollar rising 0.47%, quoted at R$ 4.0360. In the previous trading session, on May 24, the currency was quoted at R$ 4.0170.

The support of thousands of protesters in various Brazilian cities in favor of Pension Reform and Jair Bolsonaro's government helped to optimize the Brazilian financial market. However, the demonstrations that took place on Sunday, May 26, were smaller than the demonstrations against the cuts made by the current government in the area of education, which occurred on May 15.

Among protesters who took to the streets to defend the government, there were criticisms against the Congress, the political establishment, and specially directed to the president of the Brazilian Chamber of Deputies, Rodrigo Maia (DEM-RJ).

The US political risk consultancy Eurasia evaluates that the actions in defense of Jair Bolsonaro can be positive for the advance of the Pension Reform.

Many analysts believe that this sequence of major anti-government and pro-government demonstrations points to a major political division in the country, which could become more acute if demonstrations continue to grow. The next demonstration against the government is scheduled for May 30.

Brazilian construction sector confidence falls in May

According to the Getulio Vargas Foundation (FGV) reported today, the confidence of the construction sector fell 1.8 points in May compared to April, reaching 80.7 points.

The average price of residential real estate in Brazil rose more than the level of sectoral inflation measured by the National Construction Cost Index (INCC), according to a survey conducted by the Brazilian Chamber of Construction Industry (CBIC).

Despite this scenario of lack of confidence and rising real estate prices, the Brazilian Chamber of Construction Industry (CBIC) believes that sales and launches of residential real estate in the country are expected to grow around 10% to 15% in 2019.

GDP growth projections in Brazil fall for the thirteenth consecutive time

Financial market analysts heard by the Brazilian central bank downgraded by 0.01 percentage point the forecast for Brazil's Gross Domestic Product (GDP) in 2019. According to the Focus Bulletin, released today, May 27, the Brazilian economy should move forward 1.23% in 2019. Last week, the forecast was 1.24%.

The Focus Bulletin is a weekly report released by the Brazilian Central Bank. It indicates the expectations of more than 100 institutions of the Brazilian financial market on various indicators of the Brazilian economy, such as GDP, inflation, exchange rate and Selic (basic interest rate).

Insolvency remains high among Brazilian consumers

Two years ago, Brazilian financial institutions were forced by the Central Bank of the country to reduce the time that left consumers rolling the debt on the credit card. This measure aimed to reduce the level of default among Brazilian consumers.

When this measure was announced by the Brazilian Central Bank, credit card interest in Brazil had the highest cost of the world financial system. The average rate has dropped from an unbelievable range of 500% a year to the current 300%, which is still very high.

Entering this type of debt is a clear indication that the Brazilian consumer still faces many difficulties in paying its debts. The level of defaults in the country in 2019 follows around 35%.

To make matters worse, in 2019, defaults by micro and small companies in Brazil reached a record high. The number of defaulters reached 5.3 million in March 2019, according to Serasa Experian.

According to the International Monetary Fund (IMF), the already slow economic recovery in Brazil is at risk

The International Monetary Fund (IMF) has warned this week of the risks posed by domestic and external shocks to the Brazilian economy. According to the IMF, these shocks can hinder the already slow recovery of the Brazilian economy.

According to the IMF, investments in Brazil "remains subdued, retained by idle capacity and persistent uncertainty about the prospects for fiscal and structural reforms. Weak global growth and recession in Argentina are affecting exports. The growth in 2019 is projected between 1% and 1.5%, with significant risks of decline."

For the IMF, the main risk related to the Brazilian economy is associated with the approval of a Pension Reform that generates a "robust" economy to the public coffers in the long term.

Brazilian company Natura buys Avon Products

Natura, the Brazilian cosmetics manufacturer, sent a statement to the market confirming the purchase of US competitor Avon Products. The business had been speculated a few weeks ago by the market. The operation creates, according to the statement of Natura, "the fourth largest exclusive beauty group in the world". An agreement will be made to exchange shares between the two companies: while Natura will control about 76% of the combined group, the rest will be held by Avon shareholders. Taking into account the values of the closing of the shares the day before, the group is valued at US$ 11 billion (about R$ 44.5 billion).

Now along with Avon, Natura must have annual revenues of over US$ 10 billion and more than 40,000 employees worldwide. 

In recent years Natura has adopted an aggressive policy of expansion. In 2013, the Brazilian company bought Australia's Emeis Holdings, a manufacturer of premium beauty products, which operates under the Aesop brand. In June 2017, Natura announced the purchase of 100% of the Body Shop, which belonged to the French L'Oreal, in operation of about 1 billion euros.

The B3, the main indicator of the Bovespa, falls after Brazilian Economy Minister Paulo Guedes threatens to resign

Today, May 24, 2019, the Bovespa Index had its third consecutive day of low. B3's main share index rose more than 1% in the morning, but lost its force in the afternoon and closed 0.30% lower at 93,627.80 points.

This fall occurred after VEJA magazine published an exclusive interview in which the Economy Minister, Paulo Guedes, said he would resign if reform proposal becomes just a "little Pension Reform".

In the week, however, the Brazilian stock market was up 4.04%.

The dollar, on the other hand, closed today at R$ 4.0152, the lowest price in 10 days. The Brazilian Real was the emerging currency that strengthened the most on Friday in relation to the US currency.

One-fifth of Brazilian families use coal to cook food because of pricing policy for household gas of Petrobras

According to a survey published by the IBGE (Pnad Contínua), the impoverishment of the population produced by the prolonged economic crisis combined with rising unemployment and the price of LPG (Liquefied petroleum gas) cylinder led one-fifth of Brazilian families to use firewood or charcoal for cooking. Today, 14 million households prepare food in this way, an increase of 27 percent or three million homes between 2016 and 2018. In the Southeast fo Brazil, growth was 60 percent.

Meanwhile, Petrobras maintains a more expensive price for cooking gas than the one practiced internally since 2018 to recover losses that the company has had in recent years. It is a monopoly that harms the Brazilian people for the benefit of foreign and Brazilian investors.

Unfortunately, this pricing policy of Petrobras is driving the poorest classes in Brazil to return to using firewood to make food. A return to the Middle Ages. It is a country where the "modernity" of the "market prices" practiced by Petrobras forces the use of firewood and coal.

In Brazil, the readjustments in the price of LPG (liquefied petroleum gas) practiced by Petrobras are quarterly and consider international price averages and the exchange rate in previous quarters. It is this policy that led thousands of Brazilians to cook between soot and smoke.

Brazilian consumer confidence index retreats for the 4th consecutive month

Getulio Vargas Foundation (FGV) released today that the Brazilian consumer confidence index declined 2.9 points in May compared to April, from 89.5 to 86.6 points.

This is the lowest level of the index from October 2018, when it stood at 85.4 points. Currently, the consumer confidence index accumulates a loss of 10 points in 4 months.

According to Viviane Seda Bittencourt, "the result of May 2019 shows a significant increase in consumer dissatisfaction with the current situation, especially among families with lower purchasing power. A change in this situation seems to be conditional on the reduction of the high levels of political and economic uncertainty observed in the country today. "

US Dollar continues high in Brazil

The rise in the dollar increases the cost of living in Brazil. Many products sold in Brazil have their prices linked to the US dollar quotation. Drugs and fuel prices are deeply affected by the dollar's price in Brazil.

Foreign capital flows are very important for Brazil. However, the slow pace of Pension Reform in the National Congress drives international investors to become more pessimistic about making new investments in Brazil.

Since May 16, the price of the US dollar in Brazil has exceeded R$ 4.00 and remained above this level. Today, the dollar is up in the Brazilian financial market.

Many analysts are saying that it will only return to a lower level if there is an improvement in the climate abroad, with a possible understanding between China and the United States, or if there is greater confidence in the approval of the Pension Reform in Brazil.

Brazilian legislature approves tax reform without the help of Jair Bolsonaro's government

Without the help of the government of President Jair Bolsonaro, the Constitution and Justice Commission of the Chamber (CCJ) of Deputies approved the admissibility of the tax reform. 

The proposal provides for the replacement of five taxes by one, the IBS, within ten years. The objective is to simplify and make more transparent the collection of taxes.

The text, authored by deputy Baleia Rossi (MDB-SP) and the economist Bernard Appy, director of the Center for Fiscal Citizenship (CCIF), goes to the special committee without any help from the government, that now is seen as an impediment to the adoption of reforms.

The Chamber of Deputies, therefore, decided to carry out its own economic agenda without any articulation by the government of Jair Bolsonaro. 

On the day Congress began to vote on a proposal for tax reform, the Federal Revenue Secretary of the current government, Marcos Cintra, declined an invitation to discuss the issue in the Chamber of Deputies. Thus, the only government representative in the area decided would not participate in the debate and approval of the reform made today in the CCJ.

After approval of the text in the CCJ, Cintra said that the government will support tax reform approved today. Cintra's speech was seen as paradoxical.

Brazilian public banks will have to return to the public coffers around R$ 20 billion in 2019

According to a report published today (January 22, 2019) by the newspaper Valor Econômico, Brazilian public banks will have to return to the Union at least R$ 20 billion in 2019.

Public banks that must return money to the public coffers are Caixa Econômica, Banco do Brasil, BNDES, Banco do Nordeste and Banco da Amazônia.

The funds are part of R$ 86 billion in loans that the institutions received from the federal government as a capital increase during the management of Dilma Rousseff (2011-2016).

According to the publication, the money returned will be used to crush the public debt. In 2019, the government is allowed to stay in the red by up to R$ 139 billion.

Brazilian government announces thousands of state layoffs

In the midst of one of the biggest crises in the history of the Brazilian labor market, the current government announced a severe cut of personnel in Brazilian state-owned companies. The measure is expected to reach more than 25,000 employees by the end of 2019, according to data from the companies and the Ministry of Economy compiled by the "G1" website.

The federal government has already approved seven programs of voluntary dismissal or incentive retirement in companies such as Correios and Embrapa. The official projection is that the downsizing will bring savings of about $ 2.3 billion annually to public coffers.

In the short term, reducing public service employment, particularly during the current time of severe financial crisis, adds workers directly to the Brazilian unemployment lists. It is a measure that reduces consumption and further affects the economy, amplifying the effects of a possible return to recession.

Currently, unemployment reaches 13.4 million Brazilians. Of these, 3 million have been for 2 years or more without formal employment.

Income inequality in Brazil is the highest in seven years

According to a survey by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre/FGV) released today, income inequality reached the highest level in seven years. The Gini index, which stood at 0.627 in the first quarter of 2019, is the highest since the first quarter of 2012, the beginning of the historical series when the number was 0.608. According to the Gini index, when the closest to 1 more unequal is the country.

The main reasons are the upward unemployment rate, hitting 12.7% in the first quarter of 2019, and the prolonged effects of the recession that began in 2014.

The projected GDP growth in 2019, which is around 1% according to several analysts, will not change this picture. Therefore, the picture of inequality must remain in Brazil at least until 2020.

Brazilian government actions to stimulate job creation undergo cuts

A survey of the Open Accounts Association points out that 25.2% of resources aimed at stimulating job creation. The largest contingency was in the amount allocated to the integration system of employment, labor, and income, which lost R$ 44.8 million. The project to modernize and expand the service network of the unemployment insurance program, of the Brazilian National Employment System, lost R$ 9.6 million. The resources for public registrations in the area of work and employment were reduced by R$ 4.1 million.

The note on contingency in government actions aimed at job creation was seen as discouraging by many economic analysts. Especially when Brazil is experiencing an increase in the number of people looking for work and the federal government decides to cut R$ 59.2 million on actions to stimulate the opening of new jobs in the market.

Jair Bolsonaro moves towards political radicalization

According to the newspaper Folha de S.Paulo, "the text distributed by the President of Brazil, Jair Bolsonaro, to the allies was read by leaders of other Brazilian parties as a nod to radicalization." For politicians of those parties, Bolsonaro wants to return to the command of Brazilian politics using his public support.  According to Folha de S.Paulo, audiences on the internet of Bolsonaro supporters say that "the rotten part of the Congress and Senate, plus the STF (Federal Court of Justice) with the support of Globo Network, are uniting to try to overthrow the captain (Bolsonaro) and we will not let."

Many Brazilian political analysts are comparing the text published by Bolsonaro with the resignation letter of former Brazilian president Jânio Quadros, who also tried, through a text that spoke of "hidden forces" that made it impossible to administer Brazil, win the support of the population. The strategy did not work. Former president Fernando Collor de Mello also tried something similar and the shot backfired. In none of these cases, the presidents gain popular support.

Other analysts believe that this new Bolsonaro strategy was prompted by fears of what might happen in the ongoing investigation of the Rio de Janeiro Public Prosecutor's Office, which may involve Michelle Bolsonaro and Flávio Bolsonaro, the president's wife and son.

Brazilian government self-destructs

Even with the consensus in the Brazilian society of the need for reforms, the government of Jair Bolsonaro proved completely unable to advance the reforms. Today, the president has published a text in which he affirms that Brazil is an "ungovernable" country.

The government of Jair Bolsonaro sold the idea of would go government without doing any political negotiation. This uncompromising stance coupled with the numerous errors and corruption scandals involving ministers and people close to the president put the current government on the path of growing unpopularity.

Brazil's current fiscal framework is unsustainable. The expectation of the approval of a Pension Reform still keeps the economic scenario minimally stabilized. If this does not happen, the trend is that the Brazilian economic scenario will get much worse.

Now comes the news that the National Congress intends to officially take center stage in the discussion on Pension Reform. Deputies of the Special Commission advocate abandoning the government project and instead put a substitute - alternative text to the Proposed Amendment to the Constitution (PEC) number 6 for voting. They do not want to approve the Reform proposed by President Jair Bolsonaro, who has a bad relationship with Congress.

IPC-Fipe retreats in the second week of May

The Consumer Price Index measured by the IPC-Fipe Foundation, in the city of São Paulo, the largest city in Brazil. recorded 0.15% in the second week of May, against 0.20% registered in the first week of the month.

Housing and Food pulled the fall of the IPC-Fipe. While Transportation, Personal Expenses, Clothing, and Education pulled the index up.

More than 5 million people have been looking for a job in Brazil for over a year according to IBGE

According to figures announced in the last hours by the Brazilian Institute of Geography and Statistics (IBGE), 5.2 million unemployed have been seeking employment for more than a year in Brazil. These citizens represent 38.9% of the total unemployed in Brazil. Another 3.3 million people have been unemployed for two years or more (24.8%), up 9.8% over the first quarter of 2018. In addition, 6 million people are in the line of unemployment for more from one month to less than one year (45.4%), and 2.1 million have been seeking employment for less than a month. The number of unemployed in the country rose to 13.4 million in the first quarter of 2019 in Brazil.

According to the IBGE, unemployment increased in 14 of the 27 units of the federation in the first quarter. The largest women affected by this problem were women. While unemployment averaged 12.7% in the country, among women the rate was 14.9%. Among men, it was 10.9%. According to the survey, women were the majority in the working-age population in Brazil (52.4%), but they were also the largest (52.6%) of the unemployed population.

The financial market in Brazil falls due to the inability of the Bolsonaro government to calm the country

The Brazilian stock market operated today below 90,000 points, the lowest level since January 3, 2019. In a few months, President Jair Bolsonaro burned much of the support he received from the financial market.

The economic deterioration in the Brazilian scenario, the commercial war between the US and China, the Brazilian government's inability to carry out reforms and the huge demonstrations that took place yesterday in several Brazilian cities showed the fragility of the current government of Jair Bolsonaro.

For that reason, in the coming weeks in Brazil, the country's economic scenario should be marked by volatility in the financial market. There is nothing that can reassure the Brazilian financial market in the short term.

To many analysts, the president Jair Bolsonaro has moved beyond any limits after he called thousands of people who took to the streets to speak out against cuts in the education of idiots and imbeciles.

To make matters worse, Flávio Bolsonaro, who is senator and son of the current president seems to be involved in a corruption scandal. Yesterday, a report from the Rio Public Prosecutor's Office (MPRJ) pointed out that there are indications that Flávio Bolsonaro bought and sold real estate to launder money.

Brazilian millionaires flee the country

A survey by AfrAsia Bank in partnership with the New World Wealth consultancy pointed out that 1% of Brazilians with more than one million dollars in account left the country in 2018. The reasons for the exodus include concerns about security and economy, as well as search for higher quality education and better professional opportunities. Approximately two thousand millionaires left Brazil in 2018.

In 2019, Australia was the country that received the most immigrant millionaires, were 12 thousand in total.

The richest people in the world are also the most mobile. High-net-worth individuals (HNWIs) – people with wealth in excess of $ 1 million – may decide to migrate and change for a variety of reasons.

In some cases, they are attracted to jurisdictions with more favorable tax laws or criminality, as is the case with Brazilian millionaires.

Brazilian government confused about cuts in Education area

Since taking up the post of Education Minister on April 8 of 2019, Abraham Weintraub has already been confused about the numbers and cuts he said he will make in Brazilian education - he took over after the resignation of Ricardo Vélez Rodríguez, a minister who was marked by chaos in his management of the Ministry of Education.

First, on April 30, Weintraub declared that he would cut 30% of the budget of federal universities that allowed a "shamble" in his campuses. Such universities would be the University of Brasília (UnB), the Federal University of Bahia (UFBA) and the Fluminense Federal University (UFF). 

The decision was seen by the media and by students and teachers as a kind of political retaliation, as these universities promoted debates and critical thinking against the current government. This feeling gained strength mainly because UnB, UFBA, and UFF are among the best in Latin America. Unb moved from 19th position in 2017 to 16th in the following year. The UFBA went from the 71st to the 30th.

The good performance of these universities contradicted the "mess" that the minister had said that had spread in such universities.  Against this, the Ministry of Education, through the Secretary of Higher Education, Arnaldo Barbosa de Lima Junior, came to the public to affirm that the cut of 30% would reach "in an isonomic way for all public universities."

However, criticism of the government has grown as measures announced by the Ministry of Education have been seen as a kind of persecution of a far-right government for spaces and institutions that produce critical thinking. To try to lessen the criticism, Weintraub tried to convince students and academics that blockade would be only 3.5%. This statement was made in a Facebook Live in the profile of President Jair Bolsonaro.

These muddled decisions led the Bolsonaro administration to face today's first national strike. Thousands of people took to the streets of dozens of Brazilian cities to demonstrate against cuts in education.

The errors in the Brazilian GDP growth forecasts

In the first five months of 2019, market economists have changed their projections for Brazilian GDP growth by 11 times. Their mistake was brutal: they predicted GDP growth by 3% in January 2019, now they have changed to something around 1.45%. These same analysts and economists who do not meet their four months forecast point out that the approval of the Pension Reform will solve all of Brazil's economic problems. Many times, it seems that these analysts use more of the economic terror then rational arguments based on numbers and facts.

Now many of these economists are trying to explain their misguided predictions of recovery. Many of them seem bewildered, with inaccurate explanations of the ever worse results of GDP. This indicates that economists, financial market analysts, and Brazilian businessmen were very naive in their political analysis, and unable to rationally analyze the risk that Bolsonaro's victory could represent for the Brazil economy.

According to the greatest Brazilian historian, Sérgio Buarque de Holanda (1902-1982), Brazil has no conservatives, but "backward people." In his speech, Holland referred to some figures of the Empire who defended slavery in Brazil. Now, the picture repeats itself. Many of these economists, analysts, and business people have championed Bolsonaro's candidacy even though publications such as The Economist and The Financial Times have pointed to the risks that Jair Bolsonaro's victory might represent.

For the political scientist and professor at the Department of Political Science at Unicamp and a researcher at Cebrap, Andréa Freitas, in denying any political coalitions, Bolsonaro set up his own trap. He does not want to negotiate with other political groups.

Added to this there is an undeniable inability of the current government to coordinate the National Congress politically. Besides Bolsonaro does not indicate that he will make an effort to build policies along with other parties, the current president argues that any type of political negotiation is necessarily corrupt. Not sharing power with the other political parties will prevent or make very difficult any measure proposed by the current government.

Another important factor is the party of President Jair Bolsonaro, the PSL. Basically made up of first-time deputies, with no experience in the political game, the PSL is a confusing political party. Many of his deputies are moving in opposite directions in an attempt to secure influential positions in the House of Representatives. Some of these positions are even contrary to government proposals.

IBC-BR falls 0.28% in March 2019 versus February 2019

After retreating 0.98% in February, the Brazilian economy had a new low in March this year. The Central Bank's Economic Activity Index (IBC-Br) retreated 0.28% in March from February, in the seasonally adjusted series, the Brazilian Central Bank said today.

Companies with shares in the Bovespa also presented small results. Guararapes, a clothing retailer, did not perform well in the first quarter of 2019. Only companies such as Copel and Tupy had good results in the first quarter of 2019.

The main problems of the Brazilian economy today

Brazilian investors and the financial market earlier this year were very optimistic with the new government of Jair Bolsonaro. However, over the months that follow, the new Brazilian government has shown signs of not being as liberal as it had promised during the campaign, that the promised Pension Reform faces difficulties to be approved in the National Congress and the macroeconomic scenario is increasingly getting worse.

The huge loss of confidence led the Brazilian economy to continuous reductions in growth forecasts, with a possible slowdown in growth in the first three months of 2019. The second quarter of 2019 also indicates a stagnation. As a result, the country risks falling into recession in 2019.

This picture of large idle capacity within companies and very slow-paced economy should bring down inflation, but that is not what happened. Due to the increase in food prices, the country saw inflation grow and the picture became even more worrying. The slow economic recovery, after the recession that occurred in the governments of Dilma Rousseff and Michel Temer, with rising inflation increases instability.

The truth is that the Brazilian Financial Markets (analysts and economists) and the Brazilian businessmen bet very high on a government that was not able to respond to the height to that bet.

As the country's GDP does not grow, the collection capacity of the Brazilian government has decreased. Because of this, the government will be forced to make cuts in the budget, which follows the projection of GDP. The government is expected to cut about R$ 40 billion in public spending by 2019. To make matters worse, the government will need an additional bill to close the accounts of about R$ 248 billion. By the end of the year, the government will have to negotiate with Congress to approve this amount to close the accounts. However, the political negotiations for the approval of this additional have not even begun.

In order to gain productivity and to compete better with other nations, the current government should be facing structural issues such as Pension Reform, tax reform and also new rules and better management of the public machine. But what we see is a government that is incapable of leading Congress in that direction. The lack of political articulation of the current government prevents these structural reforms from becoming a reality.

BNDES announces a profit of R$ 11.1 billion in the first quarter of 2019

The Brazilian National Economic and Social Development Bank (BNDES) recorded a profit of R$ 11.1 billion in the first quarter of 2019. The result represents an increase of 436.7% compared to the same period of 2018 when profit was R$ 2.1 billion.

Joaquim Levy, the president of BNDES, announced that the state bank will return to the National Treasury R$ 48 billion still in May 2019. This value refers to a part of a loan taken by the bank between 2008 and 2014.

Iedi points to Brazilian GDP growth below 1% in 2019

The Institute for Studies in Industrial Development (Iedi) of Brazil has published an expectation that the Brazilian Gross Domestic Product (GDP) should grow less than 1% in 2019. The industry should perform even worse, with retraction around 2% in 2019.

According to the Iedi Executive Director, Julio Gomes de Almeida, "there is no factor to change" this conjuncture in the short term. For him, the high level of unemployment in the country prevents a stronger growth of economic activity.

Almeida says that even if the Brazilian Central Bank (BC) reduces the Selic rate, which is currently at 6.5% per year, these measures would only show some result in 2020. This, coupled with the low competitiveness of Brazilian industry, our low levels of productivity and the crisis that currently affects Argentina, Brazil's main trading partner in the region, makes the scenario even more worrying.

In the comparison of the first quarter of 2019 with the same period in 2018, the four segments of manufacturing Brazilian industry fell: capital goods industry (-4.3%), durables industry (-3.5%), intermediate processing industry (-2%), and semi-durable industry (-1.4%). The decline of the general industry in Brazil, in turn, was 2.3%.

To make matters worse, the construction sector cut 12,648 jobs in March in Brazil.

Ibovespa falls more than 2%

The main index of the São Paulo Stock Exchange, the Ibovespa, had a very negative result today, May 13, 2019. This was the announcement of retaliation from China to the US surcharge, which began at dawn last Friday.

This dispute between China and the US coupled with the fact that financial market analysts have reduced for the 11th consecutive time their projections for growth of the Brazilian economy in 2019. According to the Focus Bulletin report released on Monday (13) by the Central Bank (BC), the economy is expected to grow only 1.45% in 2019. However, there are analysts indicating that this growth should be around 1%.

This is, for example, the projection for the Gross Domestic Product (GDP) made by Itaú, one of the largest private banks in Brazil. For Itaú, Brazil is expected to grow only 1% in 2019. Itaú also reduced next year's growth forecast from 2.5% to 2%.

Investments in Brazilian states plummet

According to Valor Econômico newspaper, state investments fell 64% compared to 4 years ago. According to fiscal reports of 23 federal units, investments fell from R$ 2.65 billion in the first two months of 2015 to R$ 934.8 million in the same period of 2019.

In the case of Rio de Janeiro, for example, investments totaled R$ 6.7 billion in 2015 for an expected investment of around R$ 300 million in 2019. This is a very evident example of the terrible economic situation of many Brazilian states. This degree of deterioration in state investments results from the high level of financial imbalance of the state accounts in the last five years.

The projections of economic growth, due to a crisis scenario very similar to last year, point down. Linking investments and business confidence to the approval of the Pension Reform can be a serious misconception since only the Pension Reform is not able to solve all the problems of the country.

There is an undeniable need for the federal government to present some short-term measures to try to minimize the crisis that affects the Brazilian economy.

Disapproval of the Bolsonaro government rises from 20% to 31%

Ipespe Research commissioned by XP Investimentos indicates that the disapproval of the current Brazilian government rose from 20% in January 2019 to 31% in May 2019.

In the same period, according to the same survey, government approval fell from 40% to 35%.

The current government operates under a dynamic of constant conflict, permanently creating enemies, even inside the government itself, and presenting few exits to the economic crisis in which the country finds itself.

The frustration of many voters is directly linked to the feeling that the current president is on a permanent election campaign. As macroeconomic indices such as unemployment, inflation, and industry performance present an increasingly difficult picture, voters want solutions and no longer debates on moral issues.

If the current government does not offer some sort of solution to the crisis affecting the country, the trend is the economic scenario that is bad enough to worsen further. This, in turn, will further weaken the current government.

Brazil: a desert of economic ideas

The current Brazilian economic scenario is catastrophic after years of low economic growth, fiscal uncontrol, and high unemployment rates. The whole contingency of the government that now hits hard federal universities and is sold by the government as a measure to try to cover the gap in the economy conceals, in fact, the lack of economic proposals of the current government for Brazil to leave the crisis frame in which is found.

The government uses the approval of the Pension Reform as the great measure capable of making Brazil grow again. The previous government, of president Michel Temer (who is back to jail in corruption probe), sold the labor reform in the same way. The then Minister of the Economy Henrique Meirelles went so far as to say that the reform would produce 6 million new jobs, but what actually occurred was the rise in unemployment.

Weak macroeconomic data are the result of the lack of proposals by the current government and the orthodox reforms adopted since the arrival of Joaquim Levy to the Brazilian Ministry of Economy during the second Dilma government in late 2014. Levy, now president of the BNDES, initiated a series of orthodox economic measures. Since there should be no Bolsonaro government spending increasing demand and Brazilian entrepreneurs do not seem willing to bet on the Brazilian economy, in the medium term the Brazilian economy should remain weak.

All indications are that in the coming months' recessive adjustments will continue amid the scrapping of Brazil's physical and social infrastructure.

Brazil: inflation higher than expected by the government

Inflation in Brazil continues to rise, reaching 4.94% per year and getting distance from the center of the official target for 2019, which is 4.25%.

According to the IBGE, the Broad National Consumer Price Index (IPCA), considered the country's official inflation, stood at 0.57% in April 2019. This is the highest rate for a month in April since 2016 when the index was 0.61%.

When it reached 4.94%, the accumulated in 12 months exceeded the central inflation target of 4.25% set by the National Monetary Council (CMN).

The rise in the price of medicines was one of the main reasons for the growth of inflation in Brazil. The upward trend in inflation in Brazil is expected to continue higher due to the 3.43% increase in the price of the gas cylinder, authorized by Petrobras and in effect since 5 of May, and also by the increase in the price of energy consumption.

Brazilian teachers announce general strike for May 15

Although the Social Security Reform begins to move in the National Congress, the policy of cuts in education spending adopted by the government of Jair Bolsonaro may take to the streets students who have overthrown the Dilma and Collor government.

The 2013 demonstrations that would eventually lead to the downfall of the Dilma government began with students protesting against a 20-cent increase in public transportation fares.

Now, with the policy of drastic cuts in the budget of the federal universities of the current government, everything indicates that the student movement can return to the streets. The first test will be on May 15 when teachers will make a general strike. If the movement gets the students' support, the Brazilian social situation may become even more chaotic.

Added to this scenario, the macroeconomic data for 2019 are very negative. There are analysts already indicating that the country may be heading into a new recession. Unemployment growth can also help to amplify the level of dissatisfaction in Brazilian society.

Justice orders former President of Brazil Michel Temer to return to prison

The Brazilian Justice today decided by two votes to one, that former President Michel Temer and Colonel João Baptista Lima Filho return to prison. The decision to revoke habeas corpus was judged by three judges of the Federal Regional Court of the 2nd Region. By 2 votes to 1, the court revoked the habeas corpus granted to Temer and João Baptista.

Temer had previously been arrested on March 21, 2019. He is accused of leading a criminal organization that received R$ 1 million corruption money over the construction contract for the Angra 3 nuclear power plant.

The former Brazilian president also responds for crimes of corruption, embezzlement and money laundering in the Lava Jato lawsuit that runs in Rio de Janeiro under the command of Judge Marcelo Bretas

São Paulo and Pará pull down Brazilian industry in March, according to IBGE

The drop of 11.3% in industrial production in Pará and 1.3% in the industry of São Paulo in March 2019 were the main influences for the result of -1.3% of the national industry. This is what the Regional Monthly Industrial Survey, published today by IBGE, shows.

Iron ore represents more than 80% of the industry of Pará, any oscillation in this sector affects drastically the industrial activity of that Brazilian state.

In São Paulo, the motor vehicle industry was the one that had the biggest reduction in its production. Part of this happened due to the rains of March that flooded the courtyards of the companies located in the region of the ABC of São Paulo, hindering the production. Another factor is the country's poor economic performance, which harms sales of cars.

As in Argentina, the Brazilian automotive industry is one of the most affected by the economic crisis affecting the region.

Datagro announces forecast of Brazilian soybean production for 2018/2019 lower than that of 2017/2018

Datagro has raised its soybean production estimate in Brazil in 2018/2019 to 115 million tons. The volume is 6% below the total of 122.3 million tons of the record harvest harvested in 2017/2018.

Datagro also forecasts productivity of 3,205 kilograms per hectare in this harvest, 8% below the 3,470 kg/ha of the 2017/2018 harvest.

Bolsonaro says that investing in Brazil is a very risky sport

According to Folha de S.Paulo newspaper, in a meeting with governors and the two presidents of the Legislature today, Brazilian President Jair Bolsonaro said investing in Brazil is a very risky sport. According to the Brazilian president, this is because of the bad economic situation facing the country.

This kind of statement helps the country very little. The chief executive should explain solutions to the economic crisis facing the country. Words produce concrete consequences as quoted by the chief executive.

The Brazilian president should be focused on national interests and presenting solutions. So far, the government indicates that the only way out of the crisis is to approve the Pension Reform. No other economic measure considered relevant, apart from the Pension Reform, was presented and defended by the current government.

Brazil leaves the list of A.T. Kearney of more reliable countries for foreign investment

The ranking of consultancy A.T. Kearney, which lists the 25 most reliable countries for investments, removed Brazil from this group of countries.

The list was created in 1998 and since its creation, Brazil was among the countries listed as more reliable for foreign investment.

The ranking is based on surveys of 500 executives from leading companies worldwide. Now, China, India, and Mexico are the only emerging countries in the ranking.

Petrobras profits down 42% in the first quarter of 2019

Petrobras closed the first quarter of 2019 with a profit of R$ 4 billion, 42% lower than the same period of 2018. The declines in oil and gas production coupled with interventionist actions by the government of Jair Bolsonaro were the main reasons for the performance lower than the first quarter of 2018.

The performance of the first quarter of 2019 again showed a mismatch between the projections made by economists and banks earlier this year and the economic reality of the country. For example, projections from six banks indicated early in 2019 that Petrobras would make a profit of around R $ 5.6 billion in the first quarter of 2019.

Many oil industry experts also point to Petrobras' worrisome high-debt expert, 3.1 times the company's cash generation. Currently, Petrobras' indebtedness stands at R$ 372.2 billion.

Petrobras said one of the main reasons for the drop in profit was the shutdowns in production for the maintenance of the platforms. According to the company, production is expected to return to normal in the coming months.

Trump maintains a blockade on OECD and not fulfill the agreement with Bolsonaro

The United States has maintained the impasse in the entry of new members into the Organization for Economic Cooperation and Development (OECD). With that, Trump failed to comply with the promise made to Bolsonaro during the meeting between the two heads of government in Washington on March 19.

The Brazilian government's expectation was that the Trump government would take advantage of the meeting of the OECD Council of Representatives, held today, to unblock the demand from Brazil and other countries to join the OECD.

Washington did not change its document to include Brazil in its proposal alongside the Argentine government, which has its entry into the OECD backed by the Trump government.

Inefficiency in public spending costs billions to Brazilians according to IDB

A study by the Inter-American Development Bank indicates that inefficiency in public spending causes a loss of 3.9% of Brazilian GDP. The survey points out that in Brazil, inefficiency in the use of these resources generates a loss of US $ 68 billion per year, equivalent to 3.9% of GDP (Gross Domestic Product).

The IDB says that Brazil is, in relative terms, the country with the highest spending on Social Security in Latin America, spending 7 times more on the older population compared to the youngest. This framework points to the undeniable need for a Pension Reform.

According to the Folha de S.Paulo newspaper, according to the IDB calculations, Brazil could save the equivalent of 1.6% of GDP if it guaranteed that the resources of its income transfer programs would be passed on to the poorer sections of the population, diversion to the richer strata. For the bank, this is what happens with subsidies and tax benefits granted by the Brazilian government, for example, to sectors such as the automobile industry.

Reduction in the pace of growth of the global economy should worsen the situation of the Brazilian economy

The resurgence of the commercial confrontation between China and the United States added to the slowdown of the European economy will affect the growth of the Brazilian GDP.

In Brazil, the Social Security Reform proposed by Jair Bolsonaro's government has not yet been able to raise enough votes in Congress to approve this change. With this, the country continues with serious problems in its public accounts.

The fact that the Brazilian reform agenda does not move in the National Congress greatly affects investments in the country.

The average annual GDP growth since 2016 is at 1.5%. By 2019, the forecast, which at the beginning of the year reached 3% GDP growth, is now around 1.5%. There is a general perception of distrust in Brazil. Few economic agents believe that the country will leave this almost stagnant picture.

To make matters worse, the unemployment picture continues to rise, an indicator that points to a stagnant economy. The Brazilian industry, an important driver of the economy, is experiencing an evident process of the deindustrialization of the country. This reduces the size of Brazil in the world economy.

So far, the current government has not presented any strong policy aimed at the development of the Brazilian economy. There is, for example, no inducement of growth through state investment in infrastructure works.

To get an idea of what could be done, Brazil's numbers on basic sanitation have stagnated for about three years, which means that little or no investment has been made in this sector. There are currently 35 million people in Brazil without access to the drinking water network, 95 million people live in places without sewage collection, and only 46% of sewage is treated in Brazil.

The Brazilian economy has one of the smallest growths on the planet

A study made by the Brazilian Institute of Economics of the Getúlio Vargas Foundation (Ibre/FGV) points out that, between 2011 and 2020, the expansion of the Brazilian economy should only surpass that of 18 countries among the 191 monitored by the International Monetary Fund (IMF).

According to the IMF, Brazil is expected to grow about 0.9% between 2011 to 2020, an estimate lower than the expected average in Latin America (1.7%) and global emerging economies (4.9%).

Unpredictability stalls Brazil's growth, whose GDP grew by 1.1% in 2018 and is expected to grow by less than 1.5% by 2019.

Four years ago, in April 2015, the IMF released some very pessimistic forecasts for Brazil for the decade 2011-2020, pointing to average growth of only 1.8% per year in the period. Today, we know today that these forecasts were extremely optimistic: we had two years of GDP fall of 3.5% and the peak of inflation in double digits. Worse, the average annual growth in the decade should run a frightening 0.8%, setting the second decade lost in a generation.

According to the economist Roberto Dumas, from the economic point of view, the 1980s in Brazil were called the "lost decade" due to a rampant inflationary process, public accounts in total uncontrolled, contracting with the International Monetary Fund ), as well as a strong devaluation of the currency due to ill-prepared economic plans.

Debt and unemployment hit young Brazilians

According to SPC Serasa, 4 out of every 10 young Brazilians have a debt that has already won and has not been paid. Unemployment is the main reason for the very high level of indebtedness among young Brazilians. According to the website Poder360, the unemployment rate among young Brazilians is 30%.

This same survey carried out by SPC Serasa pointed out that at least one in four Brazilians who bought with credit cards entered the revolving credit in February 2019, a month in which the average annual interest rate charged by this modality loan was in 286.9% per year in Brazil.

The high level of unemployment among young Brazilians and the inexistence of other cheaper lines of credit ends up pushing a multitude of young people to one of the most expensive loan modalities in the world.

This is the scenario for a country with 27.9 million unemployed/underemployed, 63 million defaulters and whose banks charge the highest spreads in the civilized world. The current government, and also the previous government, does nothing to change the situation. On the contrary, it uses the Central Bank to impose norms capable of reducing the performance of the Fintechs. An example of this is the Resolution 4.658 of the National Monetary Council. This rule makes it more difficult to comply with the technical, legal and economic adjustments imposed by National Monetary Council (CMN) Resolution 4.658, which, in turn, diminishes the capacity of the Fintechs and reduces the supply of credit in the country.

Goldman Sachs warns about Brazil's industrial scenario

After the Brazilian Institute of Geography and Statistics (IBGE) pointed to a drop of 1.3% in March 2019 in Brazilian industrial production, Goldman Sachs warned that the economic crisis that currently affects Argentina may impact negatively the Brazilian industrial production.

As reported in the Poder360 website, Argentina is Brazil's third largest trading partner. According to data from Brazil's Ministry of Industry, Foreign Trade and Services (MDIC), between January and March 2019, the value of exports to Argentina totaled US$ 2.34 billion.

Therefore, the Brazilian Industry must be impacted by the Argentine economic crisis. In addition to undermining Brazilian exports and industry, the Argentine situation serves as a warning for the country, said Alberto Ramos, the chief economist for Goldman Sachs in Latin America.

For Ramos, since the end of Dilma Rousseff's first term in Brazil, there has been a need to make a fiscal adjustment.

Brazilian industry lost the first quarter of 2019

Industrial production fell 1.3% in March 2019 compared to February 2019, in the seasonally adjusted series, the Brazilian Institute of Geography and Statistics (IBGE) announced today. Overall, Brazilian industry shrank -2.2% and the first quarter of 2019 closed negative.

Still, in March of 2019, the level of industrial production was 17.6% below the peak of the historical series of the IBGE, which was registered in May 2011, during the Dilma Rousseff government.

To make matters worse, industrial production fell by 6.1% compared to March 2018. The percentage of Brazilian households with debt (in arrears or not) reached 62.4% in March 2019. The index is higher than 61, 5% from February 2019 and 61.2% from March 2018. This scenario of low economic activity in the country greatly limits the companies' indebtedness capacity.

Brazilian financial market expects figures from US economic activity

Unemployment data, salary data and various other information on the US labor market will determine the behavior of the financial market in Brazil today.

If the payroll numbers are positive, with strong economic growth, interest rates would remain stable. This would lead foreign investors to seek other places to invest in. The positive US scenario may, therefore, lead Brazil and other emerging countries to receive more investment.

In case the US data is worse than expected, the dollar and the stock market in Brazil must undergo strong changes.

This is coupled with reductions in growth assessments of the Brazilian economy, which grew by more than 3% from the beginning of 2019 to around 1% and 1.5% per year.

Companies of Brazilian deputies and senators owe R$ 320 million to Social Security

The website Poder360 indicated that 48 politicians fulfilling the mandate of federal deputy and senator in the Brazilian National Congress are owners, partners or presidents of companies that add up to R$ 320 million of social security debts with the Union.

This means that at least 48 votes for a possible Pension Reform will be given by individuals whose companies have debts with the National Social Security Institute (INSS).

Meanwhile, a group of businessmen who support the Social Security Reform opens a lobby office in Brasilia to try to avoid that the reform, considered vital for the resumption of the growth of the Brazilian economy, is barred in the National Congress.

This group includes Flávio Rocha, owner of Riachuelo, who according to Valor Econômico newspaper has already criticized Brazilian rules for labor inspection in a condition analogous to slavery, and Luciano Hang, owner of Havan, which was, according to El País, convicted of INSS's evasion and the crime of currency evasion and money laundering.

Citi Brazil again lowers its estimate for the growth of the Brazilian economy

Citi Brazil now expects Brazil's Gross Domestic Product (GDP) to increase by 1.4% in 2019. This forecast is lower than the 1.8% forecast for April, well below the 2.2% previously estimated by the same bank at the beginning of the year.

The weaker growth is, according to Citi, the steady increase in the estimates for the unemployment rate in Brazil.

The Citi also predicts a 30 percent probability that the Brazilian Central Bank will start cutting interest rates in the second half of 2019.

Cost of living increases for the poorest in São Paulo

O custo de vida em São Paulo, a maior cidade do Brasil, aumentou 5,10% para a população mais pobre no primeiro trimestre de 2019. For the richer classes, the increase in the cost of living in the same period was 3.67%.

The Cost of Living Index (ICV) in the city of São Paulo, which is calculated by the Department of Statistics and Socioeconomic Studies (Dieese), indicated an increase in the cost of living after analyzing the prices of 10 groups, including food, transport, recreation, personal expenses. Among them, food and transportation had the highest increases, with 1.36% and 1.26% respectively.

Meanwhile, preview inflation in Brazil accelerated to 0.72% in April, the highest for that month since 2015. The number surpassed expectations. For example, a Reuters survey with Brazilian economists estimated a 0.69% rise for the same period.

On the other hand, the Consumer Price Index (CPI) index of the Institute for Economic Research (FIPE) increased by 0.29% in April and accumulated inflation of 1.93% in the first four months.