Brazil Government Primary Deficit Moves Farther From Target

August 29, 2014

Paulo Trevisani – The Wall Street Journal, 8/29/2014

The Brazilian government moved further away from its annual fiscal target with a primary deficit in July, according to data released by the central bank Friday.

The total government, including central, state and municipal levels, recorded a primary deficit of 4.7 billion reis ($2.1 billion) in July. In June, the result was negative as well, at 2.1 billion reis.

With July’s results, this year’s accumulated primary result is a surplus of 24.7 billion reis, comparing with a 99 billion reis annual target.

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Brazil’s Mantega says opposition win could wreck economy

August 29, 2014

Alonso Soto – Reuters, 8/28/2014

Brazil’s finance minister waded into the country’s presidential campaign on Thursday, warning that an opposition victory in the October election could push the economy into recession and undo a decade of social gains under the ruling Workers’ Party.

The comments by Guido Mantega, which the opposition and some analysts criticized as unbecoming of a sitting finance minister, came on the eve of the release of official data that is expected to show that Brazil, Latin America’s largest economy, is already in recession.

Brazil’s once high-flying economy has slowed sharply in the last four years under President Dilma Rousseff, complicating her chances for re-election in October. Growth is now at a crawl, inflation is running high, and business confidence has evaporated, discouraging investment.

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Brazil enters recession in pre-election blow to Rousseff

August 29, 2014

Brian Winter – Reuters, 8/29/2014

Brazil suffered a recession in the first half of the year as investment plunged and the country’s hosting of the World Cup suffocated economic activity, a major blow to President Dilma Rousseff’s already diminishing hopes for reelection in October.

Latin America’s largest economy has suffered stagnant growth for more than three years under Rousseff’s left-leaning policies, which have dented consumer and business confidence and caused heavy losses for financial investors.

The economy took an even bigger downturn in the second quarter, contracting 0.6 percent from the first quarter, according to government statistics agency IBGE. The agency also revised down its estimate for first quarter activity to a 0.2 percent contraction, meaning the economy entered a recession.

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U.S. World Cup Love Prompts Brazil to Shift Olympic Ads

August 28, 2014

Bill Faries – Bloomberg, 8/28/2014

American enthusiasm for soccer’s World Cup prompted Brazil to shift more of its advertising toward the U.S. ahead of the 2016 Olympics in Rio de Janeiro, the head of Brazil’s tourism agency Embratur said.

U.S. citizens represented just over 10 percent of the 1.04 million foreign visitors to Brazil during the month long tournament that ended July 13, Embratur President Vicente Neto said in an interview. That made the U.S. the second-biggest source of foreign fans after neighboring Argentina, whose team made it to the final against Germany.

“It exceeded all our expectations,” Neto said in Miami last week. “We’re expecting that to be the same with the Olympics, given the U.S. history and participation in the Games.”

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Insight: Brazil’s slump hits job market as election approaches

August 25, 2014

Brad Haynes and Silvio Cascione – Chicago Tribune, 8/22/2014

Many of Brazil’s biggest retailers, homebuilders and carmakers are cutting jobs as Latin America’s largest economy teeters on the edge of recession, a fresh blow to President Dilma Rousseff’s re-election bid.

For years, low unemployment was key to Brazil’s emergence as an economic power and important gains in the fight against poverty.

The unemployment rate remains near record lows of around 5 percent and the leftist Rousseff regularly touts it as a success of the ruling Workers’ Party over the last 12 years.

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Can China-Brazil trade keep up its promising momentum

August 25, 2014

Zhang Fan – China Daily, 8/25/2014

The world is facing overwhelming change and the rise of China is among the key factors, said Marcos Troyjo, a Brazilian economist and co-director of the BRICLab at Columbia University, at a conference hosted by Brazilian law firm Demarest in Sao Paulo on Aug 19.

Troyjo said China has entered a new stage, what he calls “China 2.0″. Compared with the 30 years following the county’s Reform and Opening-up policies of 1978, China can now no longer rely on governmental investment and foreign trade to simulate its economic development.

China 2.0 needs to alter its economic development, reduce overproduction and enlarge its importation, said Troyjo, which could mean great opportunities for Brazilian industries.

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LatamWatch: Brazil Presidential Poll, First Debate Tues

August 25, 2014

Charles Newbery, James Young and Daniel Horch – MNI News, 8/25/2014

Brazil’s presidential race enters the stretch this week, six weeks before the October 5 vote, with a new poll and the first presidential debate, both Tuesday.

This poll will be the first since Marina Silva became the PSB party’s official candidate after the death of its original standard-bearer, Eduardo Campos, in a plane crash August 13. A poll last week showed her in second place in the first round of voting, ahead of market favorite Aecio Neves, then defeating President Dilma Rousseff in a runoff round October 26.

But the poll’s margins were slim, and Silva may have been benefitting from sympathy over Campos’ death. She also has not yet faced any attacks from the other candidates, and recently discord in her party, which she joined only a few months ago, has emerged.

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