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.
Friday, 10 May 2019
Thursday, 9 May 2019
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.
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.
Wednesday, 8 May 2019
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
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.
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.
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