Paulo Guedes, Brazil economy minister, says he plans to create new CPMF, a tax capable to collect up to 150 billion

In an interview with Valor Econômico newspaper, Brazilian Economy Minister Paulo Guedes announced that the country will have a new tax along the lines of the former CMPF (Provisional Contribution on Financial Movement).

The announcement is a kind of electoral fraud because Jair Bolsonaro, during the presidential campaign, promised not to recreate the tax, including calling it "disgrace" and "damn".

In the interview, Guedes said he would propose rates of 0.2% to 1% on each transaction, but it would be up to Congress to set the size of the tax. 

Another criticism about the new tax is its fate. According to Guedes, the new CPMF will have a rate of 0.2% to 1% and may raise R$ 150 billion. The old CPMF was created to increase the health budget but was not used for this purpose. Now the new tax does not even have this varnish.

The evident contradiction of government that claims to be neoliberal, but creates taxes to increase revenue. The tax, if created, will have a ripple effect and will produce distortions in the productive structure.

Several liberal-biased movements that were supporting the government are already criticizing the move. Liberal think tank Ilisp has already stated in his Twitter account that he will campaign against the new tax.

Bradesco (BBDC4) estimates that the basic interest rate of the Brazilian economy, the Selic, could close 2019 at 4.75%

Banco Bradesco revised its forecast for Brazil's basic interest rate, Selic. Now the bank's expectation is that Selic will close 2019 at 4.75% and remain at this level until the end of 2020. The previous forecast was that interest would be at 5%.

For Bradesco, the Monetary Policy Committee (Copom) of the Brazilian Central Bank should promote two further cuts of 0.50 percentage points in the September and October meetings. Afterward, Bradesco believes that the Copom will reduce 0.25 percentage points in the December meeting. That would lead to 4.75% the rate that currently stands at 6%.

This bet by Bradesco increases the pressure on the Copom and the Brazilian Central Bank, as it adds to the criticism that many economists are making against the current government's economic policy.

For economist Laura Carvalho, for example, the Copom "amid high unemployment, economic stagnation, rising wage inequalities, and below-target inflation expectations, waited" until the end of July 2019 to reduce unemployment. Selic rate by 0.5 percentage point to 6% per annum.

So far, the fall of Selic and the approval of the Social Security Reform have not been enough to leverage the Brazilian GDP. Jair Bolsonaro's government has so far presented no plans to reactivate the Brazilian economy. This, coupled with the absurd statements of both the president and ministers of his government, make the future scenario of the Brazilian economy even more uncertain.

According to Maersk, Brazil's foreign trade growth expectations slow to 2020

According to the PortoseNavios website, Maersk report indicates that hopes for resumption of Brazilian foreign trade in 2020 have fallen. 

According to PortoseNavios, "For the largest shipper in the world, there is a possibility of recovery only for 2021 due to the slower global scenario, due to the trade war between the largest powers in the world - China and the United States -, and Brexit, with the departure of the Great Britain of the European Union. In the regional context, the Argentine crisis compresses Brazilian exports, while in the local context the reason is the poor logistics infrastructure of the country".

In an interview with the newspaper Folha de S. Paulo, Maersk's Head of Product Management of the East Coast in South America, Matias Concha, stated that "unfortunately Brazil is failing to materialize external opportunities. This is the case of the real, whose devaluation is favorable for exports."

For him, the Brazilian government needs to invest in "in transportation, logistics, and infrastructure. If they do not occur, they will prevent Brazil from taking advantage of its potential."

Asked by NSC Total, if any embargoes by Brazilian positions, especially in the environmental area, could impact the market, Concha stated that "any barrier, any difficulty for trade is a concern. Whether an embargo, tax or tariff. We experienced this last year, we had a blockade of Brazilian protein exports to Russia, and that had an impact. What happens is that after 15 months of importing Brazilian meat, they were able to find different providers and today they can live without the need for Brazilian meat."

Cost of living in Brazil: inflation was 0,11% in August, according to IBGE

According to data from the Extended National Consumer Price Index (IPCA), released today by the IBGE, August inflation in Brazil slowed to 0.11%, after registering high of 0.19% in July.

The IBGE indicated a deflation in the Food & Beverage (-0.35%) and Transport (-0.39%) groups. Housing, with a high of 1.19%, was the group that positively pressured inflation. Thus, official inflation in Brazil was 0.11% in August and 3.43% in the last 12 months.

According to data from the National Association of Automotive Vehicle Manufacturers (Anfavea), vehicle production in Brazil fell 7.3% in August. Industry exports plunged 34.6% in August 2019 compared to August 2018.  This result was greatly impacted by the crisis in Argentina, the largest buyer of cars produced in Brazil.

This scenario, coupled with the very weak performance of the Brazilian economy, reinforces the idea that 2019 may have a negative GDP in Brazil.

Brazilian agricultural production value hits record: R$ 343.5 billion

According to the Municipal Agricultural Survey (PAM) 2018, released today by IBGE, the value of Brazilian agricultural production hit a record and reached R $ 343.5 billion in 2018, an increase of 8.3% compared to 2017.

Growth was driven by higher commodity prices such as soybeans (13.6%), cotton (52.3%) and coffee (22%), in a year when the grain crop fell 4.7% and the harvested area 0.5%. Despite the favorable results, the 2017 grain surplus was not exceeded in 2018, mainly due to the 16% decrease in Brazil's corn production.

According to the IBGE, "trade disputes between the United States and China, crop failures in Argentina and Chinese demand for herbaceous cotton have boosted the prices of major Brazilian commodities".

Sao Paulo, Mato Grosso, and Paraná were the states with the highest value of agricultural production in 2018 in Brazil.

Brazilian Environment Minister Ricardo Salles gives an interview to a white Canadian supremacist

Canadian YouTuber Stefan Molyneux published on his social networks, on the last day 2.09.2019, an interview with the Brazilian Minister of Environment, Ricardo Salles. The video lasts 24 minutes. In them, both speak of the recent environmental crisis involving the burning of the Amazon rainforest. 

Molyneux, however, is known for being a supporter of white supremacist ideas as well as free liberalism of state regulation. 

The interview is very revealing, as it indicates that Salles, who has decided to tackle countries like Germany and Norway, which were helping to protect the Amazon through the money they sent to the Amazon Fund, is willing to use part of his time to give an interview for an obscure social media figure rather than negotiating with the nations mentioned.

The interview points to the amateurism of the current administration, which, amid an unprecedented environmental crisis, makes accusations against possible international partners and approaches controversial figures, to say the least, and of no political importance like Stefan Molyneux.

Prior to being appointed to the post of the environment minister, Salles, like Molyneux, was a minor and controversial figure in Brazilian politics. Prior to being minister, Ricardo Salles was a federal deputy candidate for the ultra-liberal Partido Novo. During the campaign, Salles used social networks to spread messages that incited violence.

Salles's candidacy number was 30-06 in allusion to a type of ammunition, which he in his messages promised to use to combat the "boar plague" and "against the left and the MST", Landless Workers' Movement.

The Partido Novo itself disapproved of Salles's publications during the campaign. In recent weeks, the Partido Novo has tried to explain that Salles, who remains a member of the Partido Novo, did not represent the party in the federal government. Paradoxically, the Partido Novo supports the government in House votes, has a cabinet minister, but publicly says it has no connection with Jair Bolsonaro.

These are not the only problems represented by Salles, in December 2018, he was convicted of administrative misconduct and had his political rights suspended for three years. The sentence, handed down by Judge Fausto José Martins Seabra, Salles allegedly committed, when he was secretary of the environment of the government of São Paulo, various irregularities and disarray that could harm the environment.

Brazilian industrial production falls for the third consecutive month, according to IBGE; Dollar keeps rising in Brazil

The Brazilian industry recorded production losses in 11 of the 26 activities surveyed from June to July, according to the Monthly Industrial Survey data released by the Brazilian Institute of Geography and Statistics (IBGE). In the global average, production fell 0.3%, the third month followed by a negative result, accumulating a loss of 1.2% in the period. Compared to July 2018, Brazilian industrial production fell 2.50%.

The drop in Brazilian industrial production indicates that the country entered the third quarter of 2019 in a bad scenario, as the accumulated industrial production of 2019 is negative: -1.7%. The scenario is therefore very difficult for the Brazilian economy. Brazilian economic activity is expected to remain very weak in 2019.

Meanwhile, yesterday the US currency rose 0.98% in Brazil and reached its highest rate since the historic record almost 1 year ago: R$ 4.1822. In Brazil, in August, the dollar rose 8.46%. Brazil lost only to Argentina, where the US currency rose 35.80% in the same period.

CNPq scholarship cuts may paralyze most scientific research carried out in Brazil #fantastico

A report on the Fantastic television program, one of the most popular in Brazil, showed the drama of Brazilian researchers who lost their scholarships paid by CNPq.

CNPq scholarships allow the best students, children of poor families, who participate, for example, in the mathematics Olympics, to receive a monthly budget.

The theme generated the hashtag #fantastico on Twitter in Brazil. Thousands of Brazilians complain about the government's stance in cutting these exchanges. They also criticize the fact that Bolsonaro and his sons spend public money on unimportant things, such as painting the presidential plane.

In total, there are 84,000 scholarships that can be unpaid at the end of the year.

According to Datafolha, President Jair Bolsonaro's disapproval rose from 33% to 38%. Certainly, the high unemployment coupled with measures such as CNPq cut-offs, the government's evident inability to command national policy, the environmental policy that seeks, among other things, to liberate mining on indigenous lands, and the absurd statements of the President of the Republic, Jair Bolsonaro, greatly worsen the assessment of the current government. According to the survey, 44% of Brazilians do not trust the president's word.

The Brazilian economy and its slow recovery; according to consultancy McKinsey, Brazil grows well below global average

The Brazilian GDP growth in the second quarter of 2019, 0.4% over the first three months of the same year, confirms the existence of a low growth cycle in Brazil since the end of the recession in 2016.

The advance in the Brazilian GDP is undeniably too small for the size of the problem. There are more than 12 million unemployed and the growth below 1% forecast for this year does not solve this problem at all. With this level of unemployment, consumption in the country does not grow, as jobless people stop consuming to spend on what is completely essential.

There is an undeniable lack of dynamism in the Brazilian economy. To overcome this, Brazil needs public policies focused on infrastructure urgently, but this scenario is not on the Brazilian horizon. On the contrary, there are few measures aimed at infrastructure investments, especially from the federal government.

To meet the global average, Brazil needs to invest 4.7 percent of GDP in infrastructure, according to a study by consultancy McKinsey, prepared at the request of the National Bank for Economic and Social Development (BNDES) and the International Finance Corporation (IFC) of the Bank. Worldwide. Between 2000 and 2016, however, Brazil applied on average only 2.1% of GDP on infrastructure.

According to economist Laura Carvalho, "the return of direct public investment in infrastructure to the pre-crisis level would have high stimulus power, even if it were entirely covered by the elimination of tax cuts, subsidies and other lower multiplier expenses on job creation and income and/or higher income taxes for the rich." However, this is not on the Brazilian political horizon either. Therefore, everything indicates that Brazil will continue to show small GDP growth. As a result, labor supply will remain very weak in Brazil.

One of the sectors that showed improvements was the construction industry in the region of the city of São Paulo, but this is still little to reactivate Brazil's economy.

The Brazilian GDP growth forecast for 2019 to be 0.8%, according to bank UBS; numbers released by IBGE today showed that the Brazilian economy underperformed and grown 0.4% in Q2 2019

Bank UBS presented a new growth forecast for Brazil's Gross Domestic Product (GDP) for 2019 and 2020. According to UBS, in 2019, the estimate for the increase of the Brazilian GDP fell from 1% to 0.8%. Already referring to the years 2020, the institution believes that the index will grow only 1.5%, compared to 2.2% previously predicted. Therefore, in a scenario of economic stagnation, UBS forecasts even lower performance than expected.

According to economist Laura Carvalho, the current recovery of the Brazilian economy is among the slowest in recent Brazilian history. According to Laura de Carvalho's estimates, "GDP (Gross Domestic Product) in force in the first quarter of 2014 would not be reached until December 2021 - 20 quarters after the end of the recession."

According to data released today by the IBGE, the Brazilian economy underperformed and grew only 0.4% in the second quarter of 2019. This result was driven by a slight recovery of the Brazilian industry. However, compared to the same period last year, the GDP was up 1%.

Also according to IBGE data, the Brazilian extractive industry had a record drop: -9.4%. This was the sharpest drop in the historical series of this sector. Vale's crimes in Brumadinho (where 248 people died and 22 others are missing) and the paralyzing of other dams for inspection in an attempt to prevent further tragedies. This, added to the rains in Pará impacted the iron ore industry in Brazil in the period.

Argentina declares a default with IMF and banks in an attempt to ease major turbulence in the country's foreign exchange market

Argentine President Mauricio Macri, announced today that he has asked the IMF to revise the maturities of its 56 billion dollar debt beginning in 2021. The measure, which would aim to alleviate the current turmoil in the country. foreign exchange market proves the failure of the neoliberal policy adopted in Argentina and defended by the current Brazilian government of Jair Bolsonaro.

This greatly worsens the situation of Macri, who has already lost primary elections to center-left candidate Alberto Fernández – whose deputy is Cristina Kirchner by a difference of 15 percentage points.

Brazilian President Jair Bolsonaro, in turn, is close to Macri. Bolsonaro has even attacked Fernández, confirming even the possibility of Brazil leaving Mercosur Fernández winning. Macri's possible defeat is largely due to the country's current economic situation. Today, Argentina has inflation of 55% and the basic interest rate is 70% per year.

According to Reuters, the rating agency Standard & Poor’s said on Thursday (29.08.2019) "that Argentina’s decision to "unilaterally' extend maturities on its short-term debt constituted a 'default'".