Brazil’s biggest problem isn’t Petrobras

April 28, 2015

Matt Phillips – Quartz, 4/28/2015

It’s not the scandal, stupid.

Last week the Brazilian oil giant Petrobras wrote down the value of its assets by some $17 billion, including $2.1 billion reflecting the impact of bribes and graft. The scandal—in which company executives allegedly received kickbacks in exchange for awarding contracts at inflated values—has prompted worries that it could creep closer to President Dilma Rousseff, who served as the chairwoman of Petrobras, during the years when much of the alleged bribery took place. So far, she hasn’t been implicated.

But as the nation’s attention continues to be riveted by the scandal, Brazil’s economy is decelerating rapidly. Numbers out this morning show that unemployment rose to 6.2% in March, up from 5.9% in February and the highest since March 2012.

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Brazil’s March Unemployment Rate Climbs in Blow to Rousseff

April 28, 2015

David Biller and Mario Sergio Lima – Bloomberg Business, 4/28/2015

Brazil’s March unemployment rate climbed to the highest level in three years as Latin America’s largest economy slips closer to recession amid rising interest rates and fiscal tightening.

The jobless rate rose to 6.2 percent from 5.9 percent a month earlier, according to data released by Brazil’s national statistics agency (IBGE). That was higher than the 6.1 percent median estimate from 32 economists surveyed by Bloomberg.

Market reaction to the report was mixed. Swap rates fell, while the currency rose and stock futures pointed to a higher opening in Sao Paulo.

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Haitian immigrants’ ‘Brazilian dream’ sours as work hard to find for tens of thousands

March 3, 2015

Adriana Gomez Licon (AP) – U.S. News, 3/3/2015

Under a scorching sun, dozens of Haitians shuffled impatiently about the brick-walled courtyard of Our Lady of Peace Catholic Church. The sight of an approaching employer sparked a skirmish, with the men pushing against each other, jostling for attention.

“How many people you need?,” several men shouted. “I need a job, what do you want me to do?” No matter what the job was, someone in the crowd yelled out, “I can do that!”

There are fewer jobs in Brazil than there are Haitians looking for work. An open-door policy intended to help migrants from the impoverished island is fueling Brazil’s largest immigration wave since World War II and prompting calls for lawmakers to do more to help the new arrivals.

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Rousseff’s austerity plan for Brazil runs into trouble with allies

February 13, 2015

Anthony Boadle and Alonso Soto – Reuters, 2/13/2015

President Dilma Rousseff’s austerity push has run into stiff opposition from her own allies in Congress that could derail her efforts to restore Brazil’s fiscal credibility and avoid a damaging credit rating downgrade.

The leftist leader’s allies, including members of her own Workers’ Party, are seeking to water down a first batch of unpopular bills that trim unemployment and pension benefits and save some 18 billion reais ($6.32 billion).

The bills are part of an austerity drive led by Finance Minister Joaquim Levy, a fiscal conservative picked by Rousseff to plug a growing public-sector deficit with spending cuts and tax hikes aimed at saving the once booming economy’s coveted investment grade.

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Brazil’s jobless rate drops as fewer people seek work

January 29, 2015

Asher Levine and Silvio Cascione – Reuters, 1/29/2015

Brazil’s jobless rate returned to historic lows in December, but wages dropped from the month before in another sign that a once-booming labor market was losing momentum.

The non-seasonally adjusted jobless rate BRUNR=ECI fell to 4.3 percent in December from 4.8 percent in November, statistics agency IBGE said on Thursday, matching the previous all-time low hit in December 2013.

The number was below the median forecast of 4.6 percent in a Reuters poll of 26 economists.

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In Brazil, a once-high-flying economy takes a tumble

January 14, 2015

Lourdes Garcia-Navarro – NPR, 1/14/2014

It was a terrible Christmas season for stores in Brazil. For the first time in more than a decade — since 2003 — sales went down.

Roberta Pimenta owns a small shop selling children’s clothes at the Butanta mall in Sao Paulo, which is aimed squarely at the middle-class shoppers who live in the area.

“It was the worst drop in sales since I’ve had this store,” Pimenta says. “In seven years it was the worst year I had. And every year you have a 10 percent increase of employees’ salary, 10 percent increase in the rent, 10 percent in everything, so it is horrible.”

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Brazilians brace themselves for austerity measures

December 5, 2014

Joe Leahy – Financial Times, 12/4/2014

Brazilians may not be in an exuberant mood this Christmas because of the country’s sluggish economy but those that have any money would be wise to spend it now.

After years of fiscal largesse, Brazil’s new finance minister, Joaquim Levy, already known in the presidential palace as “Scissorhands” according to newspaper Folha de S.Paulo, is preparing an austerity plan to rebalance the bleeding finances of Latin America’s biggest economy.

With the country’s investment-grade rating potentially at stake, Mr Levy’s axe is expected to fall on everything from popular tax breaks for new car purchases to unemployment benefits as he seeks to save about one percentage point or more of gross domestic product.

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