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
Wednesday, 8 May 2019
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.
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.
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.
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.
Tuesday, 7 May 2019
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.
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.
Monday, 6 May 2019
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.
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