December 2, 2013
Brazil’s inflation may slow to 4 percent on average over the next 10 years, Finance Minister Guido Mantega said on Monday at a seminar in Sao Paulo.
The government targets annual inflation at 4.5 percent, with a tolerance margin of 2 percentage points either way. In the 12 months through October, consumer prices as measured by the benchmark IPCA index rose 5.8 percent.
Mantega added that Brazil’s economic growth will likely accelerate to between 3.6 and 4 percent on average from 2013 to 2022 as the government focuses on boosting investments.
December 2, 2013
Press TV, 12/01/2013
Marcel Fiche’s resignation was announced by the office of Finance minister Guido Mantega on Saturday.
The decision to step down follows reports that Fiche and his technical advisor allegedly received about USD 25,700 from a communications company in exchange for a contract with the finance ministry.
“I have asked Minister Guido Mantega that I not return to cabinet at the end of my vacations,” Fiche stated in a statement on Friday.
Fiche also said the allegations against him were “lies,” adding that he wanted to contribute to a smooth and rapid investigation.
December 2, 2013
Rodrigo Orihuela & Denyse Godoy – Bloomberg, 12/02/2013
Petroleo Brasileiro SA (PETR4) fell the most in 17 months after the government failed to meet a request by the state-run company to disclose a clear policy for phasing out fuel subsidies that have cut earnings and increased debt.
Shares in Petrobras, as the Rio de Janeiro-based crude producer is known, lost as much as 7.2 percent, the steepest intraday decline since June 25, 2012, and the most among members of the Dow Jones Oil & Gas Titans 30 Index.
While President Dilma Rousseff allowed Petrobras to raise prices for the first time since March, the Nov. 29 statement fell short of disclosing details of the methodology for future adjustments. Selling imported gasoline below cost drove down profit the most among major producers last quarter. The fuel losses, a controversial capital increase and record-high debt have made Petrobras, once the sixth most valuable company, the worst-performing major oil stock in the past five years.
November 6, 2013
Brazil will likely post heftier primary surpluses in the final months of the year, but the government may need to exclude more investments from the final tally to meet its annual savings target, Finance Minister Guido Mantega said on Wednesday.
Mantega also said that meeting the primary surplus goal this year will depend on the fiscal results of states and municipalities.
The primary surplus, or revenues minus expenditures before debt payments, is considered a key measure of the country’s ability to repay its debt. A rapid deterioration of the primary surplus in the last few years has raised fears that rating agencies could lower Brazil’s credit rating.
November 4, 2013
Rogerio Jelmayer – The Wall Street Journal, 11/04/2013
The good news is that Brazil’s inflation rate is likely to show a dip when October figures are released; the bad news is that October’s dip is likely to be the last for several months to come.
Brazil’s 12-month inflation rate is likely to weigh in at 5.85% when October figures are released on Wednesday, according to the median estimate of 12 economists in a survey. That would represent a slight dip from 5.86% as of September and constitute the lowest 12-month rate since December of 2012.
But the victory could prove temporary. Brazil’s inflation rate is still far above the government’s 4.5% target and inflationary pressures are likely to rise, not diminish, in the next few months.
November 4, 2013
Joe Leahy – Financial Times, 11/04/2013
There must be moments in every politician’s career that make them cringe when recalling later on.
For Brazil’s President Dilma Rousseff one of these is probably the day in April last year when she helped failed entrepreneur Eike Batista commemorate the “first oil” from what are now his failed fields off the coast of Rio de Janeiro.
The Brazilian president said a number of things that day praising Mr Batista, who was then still the country’s richest man with a fortune estimated at more than $30bn invested in a network of oil, mining, energy and logistics companies, most of them start-ups.
November 4, 2013
Adriana Arai, Marisa Castellani & Arnaldo Galvao – Bloomberg, 11/04/2013
Brazil plans to reduce lending by its development bank by about 20 percent next year to shore up finances after posting the biggest budget deficit in almost four years, fueling speculation the nation’s credit rating may be cut. Local swap rates fell.
Finance Minister Guido Mantega said in an interview that state lender BNDES will provide about 150 billion reais ($66.6 billion) in new loans in 2014, compared with an estimated 190 billion reais this year. That would bring BNDES credit a little below 2012 levels. The government will freeze BNDES lending to states and municipalities, unwind tax breaks on consumer goods and keep current expenditures under control, the minister said.
“With respect to state banks, we will reduce stimulus,” Mantega said at his Sao Paulo office on Nov. 1. Lending “will be more focused and we will reduce subsidies.”
October 30, 2013
No date has been set yet for an eventual increase in Brazilian gasoline prices, Finance Minister Guido Mantega said on Wednesday.
Brazil’s state-run oil company Petrobras on Wednesday detailed components of a new pricing formula that would help close a large gap between local and international fuel prices that has hurt the company in recent years.
Newspaper Valor Economico said earlier on Wednesday Petrobras expected to raise gasoline and diesel prices on Nov. 22.
October 28, 2013
Merco Press News, 10/28/2013
Rousseff said Brazil had made progress in several fields in the past few months, since the government announced measures in response to spontaneous anti-government protests in June. One of the government’s pledges at the time, she said, was to ensure fiscal responsibilities.
Finance Minister Guido Mantega also criticized the IMF report as incoherent and probably compiled by technical personnel not very familiar with Brazil’s measures. Mantega said IMF chief economist Olivier Blanchard was much more in tune with the measures implemented in Brazil.
“The IMF evaluation of Brazil’s fiscal policies and debt management is mistaken and should be revised”, Finance Minister Guido Mantega said.
October 21, 2013
The Economist, 10/18/2013
IN THIS week’s print issue we wrote about the huge increase in government-subsidised credit in Brazil in recent years, funnelled through state-controlled institutions such as the national development bank, BNDES, and Caixa Econômica Federal, a state retail bank. This is weakening the banks’ balance-sheets and cutting their credit ratings—and damaging the credibility of official statistics as the government manoeuvres to try to hide the impact on its own finances.
On October 14th the finance minister signalled a change of course, saying that over the next few years the government would gradually stop capitalising BNDES with transfers from the treasury. But as we explained in print, the electoral appeal of cheap consumer credit and the government’s desire to use BNDES to fund a big upcoming infrastructure-concession programme make it doubtful that such good intentions will become reality.
Equally worrying for Brazil’s public finances is the news that the federal government is about to make it easier for states and municipalities to take on more debt. The Fiscal Responsibility Law of 2000 bailed out local governments who had taken on debts they could not repay, with one of the conditions being the acceptance of strict limits on total future indebtedness. The law is generally regarded as having been an essential precondition for Brazil’s subsequent economic stabilisation and growth, including keeping inflation under control, gaining investment-grade status, rescuing tens of millions from dire poverty and creating a vast new lower-middle class.