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 finance chief says economy to pick up after slow start

August 6, 2014

Alonso Soto and Luciana Otoni – Reuters, 8/6/2014

The Brazilian economy should pick up in the second half of the year after a slow start and hit more “reasonable” growth levels in 2015, Finance Minister Guido Mantega told Reuters on Tuesday.

Slowing inflation and an expansion in credit, as well as a recovery in mining and oil output, should help an economy that was dragged down by high interest rates and a string of holidays during the first half of 2014, he said.

“We have a more favourable outlook and see quicker growth in the second half of the year,” Mantega said. “Although 2014 will be a sort of transition year for us and for everyone in the world, we believe that we have the conditions to grow more next year.”

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Brazil dismisses IMF assessment of economic vulnerability

July 31, 2014

Cihan News Agency, 7/31/2014

Brazilian Minister of Finance Guido Mantega has rebutted a report by the International Monetary Fund (IMF) where it rated Brazil among the emerging economies most vulnerable to external crises. In his remarks on Tuesday (July 29), he said economic indicators for the first half of 2014 show that foreign investors remain interested in the country, in spite of the US Federal Reserve (Fed) tapering its quantitative easing measures. The minister also noted that foreign direct investments – which create jobs in the country – have remained above $60 billion in 12 months for the fourth straight year. Moreover, Mantega said, the Brazilian real appreciated 9.4% in the first semester, and the São Paulo Stock Exchange (BOVESPA) was up 21.25% in the same period.

According to Mantega, the report was prepared by lower echelons of the IMF and repeats the same mistakes of earlier documents disclosed by financial institutions and international organizations that report a “perfect storm” for Brazil’s economy this year and place Brazil among the five weakest emerging countries. “The storm never came, the scenario described by the reports wasn’t fulfilled,” he said.

The minister pointed out that Brazil has the fifth largest international reserves in the world, around $380 billion. The sum exceeds the public and private external debt of $330 billion, enough to see Brazil through for a long time in the event of a shortage in foreign capital.

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Brazil’s Mantega sees economy growing 2.3 percent in 2014

April 28, 2014

Reuters, 4/28/2014

Brazil’s economy will post steady growth in 2014,Finance Minister Guido Mantega said on Monday, as the country takes advantage of an improving global economic outlook.

Brazil’s economy should grow 2.3 percent this year, Mantega said at an event in Sao Paulo, the same growth rate it posted in 2013.

The number is more optimistic than the median 1.65 growth estimate in a central bank poll of economists released Monday. In February Brazil’s government said it was working with a growth estimate of 2.5 percent for the year.

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Brazil’s finance minister rejects criticism of World Cup, economy

April 10, 2014

Luciana Magalhaes & Rogerio Jelmayer – The Wall Street Journal, 4/9/2014

Brazilian Finance Minister Guido Mantega blasted critics of his country’s World Cup preparations and vowed that Brazil’s economy would revive from its lethargy, for which he mainly blamed outside forces.

“I believe that the Cup is being politicized,” Mr. Mantega said in an interview with The Wall Street Journal in New York before attending a gathering of the International Monetary Fund. “For Brazil to host the Cup, it needs to meet FIFA’s requirements for a certain numbers of stadiums and seats, and that is being done,” he said, referring to the world soccer governing body.

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The grass is greener from the outside

March 20, 2014

The Economist, 3/18/2014

BRAZIL’S government has been trying hard of late to burnish its economic credentials, dented by years of perceived interventionism, weak growth and high inflation. In February the president, Dilma Rousseff, sweet-talked investors in Davos for the first time since she took office in 2011. Later that month her finance minister, Guido Mantega, presented a revised budget for 2014, with 44 billion reais ($19 billion) in cuts and a target for the primary surplus (ie, before interest payments) of 99 billion reais, or 1.9% of GDP.

In the past few days, however, the government’s credibility has taken a knock. First, on March 13th, Mr Mantega conceded that the 9 billion reais set aside to prop up electricity utilities, reliant on hydropower but forced by lack of rain to tap pricey thermal plants, would not be enough. Another 12 billion reais would be needed, he said.

The Treasury would stump up 4 billion reais, financed in part by raising already-high taxes. The remaining 8 billion reais is to come from bank loans to the Electrical Energy Commercialisation Chamber (CCEE), a clearing house for the electricity market. The cost would be passed on to consumers, albeit only after the general election in October. Why private banks would lend that sort of money to a private entity with no assets to speak of is unclear. State-controlled lenders may end up having to step in, ultimately putting the government on the hook.

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Lew seeks to repair Brazil ties in first trip to Latin America

March 18, 2014

Kasia Klimasinska & Raymond Colitt – Bloomberg Businessweek, 3/17/2014

U.S. Treasury Secretary Jacob J. Lew discussed ways to expand trade and investment with his Brazilian counterpart as he sought to repair ties with Latin America’s biggest economy.

“Both countries recognize the great potential benefit from working together to meet the challenges of generating jobs, sustaining growth and helping support macroeconomic stability,” Lew said after meeting with Brazilian Finance Minister Guido Mantega yesterday in Sao Paulo. He said U.S. companies are seeking to provide financing and expertise for Brazil’s plans to modernize infrastructure.

Lew, in his first Latin American trip since he took office a year ago, also met with Brazilian central bank President Alexandre Tombini before traveling to Mexico City, where he will hold talks today with President Enrique Pena Nieto and top economic officials. He also discussed the crisis in Ukraine and highlighted the need for the U.S. to pass legislation to expand the voting rights of emerging markets in the International Monetary Fund.

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