Economists cheer up (slightly) on Brazil

Financial Times, 06/13/2016

Slowly and ever so cautiously, economists are daring to let themselves to get optimistic about Latin America’s largest economy again.

For the third week in a row, economists have upped their 2016 and 2017 outlook on Brazil. The consensus of the latest weekly survey published by the Brazilian central bank now sees the economy shrinking by 3.6 per cent this year and growing 1 per cent next year. Just two weeks ago, they were expecting gross domestic product to contract 3.81 per cent this year, roughly the same as in 2015 and to grow 0.55 per cent next year.

The upward revisions are a fillip for the new government led by interim president Michel Temer, who took over from president Dilma Rousseff last month after congress approved impeachment proceedings against her.

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Businesses Signal Approval of Brazil Leadership Change

Rogerio Jelmayer – The Wall Street Journal, 05/12/2016

Businesses and investors are cheering the new leadership in Brazil following the suspension of President Dilma Rousseff, who many blame for a deep recession and crumbling finances in Latin America’s largest economy.

Vice President Michel Temer, who officially will replace Ms. Rousseff later Thursday as she steps down to face an impeachment trial, is expected to quickly propose measures to cut spending and rein in entitlements.

Mr. Temer could reduce the number of government ministries — more than 30 exist now — and the potential leader of his economic team is looking to tame budget deficits. These measures aim to shrink a massive budget deficit and restore investor confidence.

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Brazil’s inflation accelerates above all forecasts in April

David Biller – Bloomberg, 05/06/2016

Brazil’s consumer inflation accelerated more than all analysts forecast in April, pushing the market to temper bets the central bank will lower interest rates.

The benchmark IPCA consumer price index climbed 0.61 percent after a 0.43 percent rise the previous month. That was more than the median forecast for a 0.54 percent increase from 44 economists surveyed by Bloomberg. Twelve-month inflation slowed to 9.28 percent.

Annual inflation at more than double the official target has hurt the confidence of Brazilians whose salaries don’t stretch as far as they once did. Making matters worse, the nation is confronting double-digit unemployment and the prospect of a second year of recession. Many believe the scope of the downturn will provide the central bank room to lower its benchmark interest rate from a near 10-year high.

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Brazil’s Corruption Culture ‘can be beaten’

Paul Moss – BBC, 04/26/2016

Even a visitor who detests shopping can admire the building’s quirkiness, a semi-arch that seems almost to fall on to the pavement, embodying the modernist curves which define architecture in Brazil’s capital.

This is a city that was constructed virtually from scratch in the 1950s and which is supposed to proclaim the new, progressive side of the country.

Yet the man I had come to meet at the mall had a story as old as his country’s creation: “When you bid for a government contract in Brazil, they usually say ‘what can you do for us? What can you do to make this contract a win-win for all of us?’ They want a percentage of the contract…which means bribes.”

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Brazil Impeachment Countdown Begins as Senate Elects Committee

Arnaldo Galvao – Bloomberg, 04/25/2016

Brazil’s Senate took its first major step forward in the impeachment process on Monday by electing members of a committee that will recommend whether to oust President Dilma Rousseff.

Senators approved in a vote the 21 members of the committee, who are scheduled to pick their president and rapporteur during their first meeting on Tuesday. The committee is made up of multiple parties and has as many as 10 days to hear Rousseff’s defense and make a recommendation to their peers whether to try the president.

Monday’s meeting reinforced a timetable that could see Rousseff’s ouster as early as May 12, as the full chamber can vote two days after the committee finishes its work. The president would have to step down temporarily if the opposition garners the simple majority it needs to start the Senate trial, which surveys conducted by local media show it currently has. Without the power of the presidency at her disposal, Rousseff will have a difficult time winning over enough lawmakers to prevail in the trial, said political analyst Rafael Cortez.

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The real reason Dilma Rousseff’s enemies want her impeached

David Miranda – The Guardian, 04/21/2016

The story of Brazil’s political crisis, and the rapidly changing global perception of it, begins with its national media. The country’s dominant broadcast and print outlets are owned by a tiny handful of Brazil’s richest families, and are steadfastly conservative. For decades, those media outlets have been used to agitate for the Brazilian rich, ensuring that severe wealth inequality (and the political inequality that results) remains firmly in place.

Indeed, most of today’s largest media outlets – that appear respectable to outsiders – supported the 1964 military coup that ushered in two decades of rightwing dictatorship and further enriched the nation’s oligarchs. This key historical event still casts a shadow over the country’s identity and politics. Those corporations – led by the multiple media arms of the Globo organisation –heralded that coup as a noble blow against a corrupt, democratically elected liberal government. Sound familiar?

For more than a year, those same media outlets have peddled a self-serving narrative: an angry citizenry, driven by fury over government corruption, rising against and demanding the overthrow of Brazil’s first female president, Dilma Rousseff, and her Workers’ party (PT). The world saw endless images of huge crowds of protesters in the streets, always an inspiring sight.

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VP Leads Brazil While Embattled Rousseff Travels

Rafael Romo – CNN, 04/21/2016

It’s a new chapter in Brazil’s deep political crisis, which at times reads like a tropical telenovela. The South American country now has a new president, although it will only be for a few days.

Brazilian Vice President Michel Temer is technically in charge of Brazil — albeit temporarily. How is this possible? It’s all thanks to a particular clause in the Brazilian Constitution which implies that if the president in power leaves the country, the vice president assumes control of the executive power.
His former running mate and current political rival, embattled President Dilma Rousseff, is visiting the United States and plans to attend a climate conference in New York on Friday. That means Temer is not only calling the shots at home, but has effectively become the president … until she returns.