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%.
Tuesday, 9 April 2019
Monday, 8 April 2019
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.
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.
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.
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.
Sunday, 7 April 2019
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.
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.
Saturday, 6 April 2019
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.
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.
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.
Friday, 5 April 2019
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.
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.
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.
Thursday, 4 April 2019
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.
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.
Wednesday, 3 April 2019
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.
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.
Subscribe to:
Posts (Atom)