Brazil’s 2015 Economic Growth Will Be ‘Almost Flat,’ Says Finance Minister

January 23, 2015

Matt Murray – The Wall Street Journal, 1/23/2015

DAVOS, Switzerland—Brazil’s economic growth will be “almost flat” in 2015 amid a series of tax increases and spending cuts at home, as well as slower global growth, Finance Minister Joaquim Levy said in an interview at the World Economic Forum in Davos.

“We have to deal with short-term issues on investment,” Mr. Levy said. “There are lots of things to be done in Brazil.”

A survey of economists by the country’s central bank this month forecast that Brazil’s GDP will grow by only 0.5% this year, following an estimated 0.15% expansion in 2014.

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Davos 2015: Brazil warns of austerity

January 22, 2015

Gideon Rachman and Joe Leahy – Financial Times, 1/22/2015

Brazil is in for a period of austerity and supply side reform, including the potentially controversial overhaul of social welfare programmes, such as unemployment benefits, according to Joaquim Levy, the new finance minister.

Speaking to the Financial Times in an interview at the World Economic Forum in Davos, Mr Levy said that, in order to get government finances into order, “we will have to cut in several areas”. He stated his intention to “get rid of subsidies and get prices right”, highlighting “energy and other areas” as potential targets. In addition, Mr Levy wants to see reform of government welfare programmes, arguing that the design of Brazil’s unemployment benefit schemes is “completely out of date”.

Mr Levy acknowledged that a period of austerity could have an impact on economic growth, saying: “I think flat growth cannot be discarded as a possibility although GDP growth in Brazil is resilient.” He argues that Brazil is now more in need of supply side reforms than a stimulus to demand and expressed confidence that “as we get our house in order, the reaction will be positive”.

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Brazil’s Rousseff Cancels Davos Trip To Attend Bolivian President’s Inauguration

January 15, 2015

Brianna Lee – International Business Times, 1/14/2015

Brazilian President Dilma Rousseff has been focusing her energy on restoring investor confidence in Brazil just months after narrowly winning her second term against a market-oriented opponent. But she is now drawing attention for scrapping plans to attend the World Economic Forum in Davos, Switzerland, next week, opting instead to go to the swearing-in ceremony of Bolivian President Evo Morales.

Rousseff had not confirmed her attendance at the forum, which takes place Jan. 21-24. According to local reports, she made a late decision Tuesday not to attend the international meeting so that she could travel to La Paz, Bolivia, for Morales’ inauguration as he starts his third term. Newly appointed Finance Minister Joaquim Levy and Alexandre Tombini, the president of Brazil’s central bank, will go to the forum to represent the country.

The president sparked criticism for her decision, with Brazilian weekly magazine Veja commenting that it would have been an “opportune moment” for her to restore investor confidence by attending the Davos meeting, given Brazil’s “worsening economic indicators and external pessimism.” But Brazil’s Estadão newspaper, citing an unnamed presidential aide, said the president was concerned about stoking domestic political turmoil with an overseas trip in the wake of looming legislative elections.

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Rousseff vows to make Brazil more competitive

January 27, 2014

Paulo Trevisani  & John Lyons – The Wall Street Journal, 1/24/2014

Dilma Rousseff, flew to the global capitalist summit in Davos, Switzerland, for the first time as Brazil’s president and delivered a plea for foreign investment, underscoring the urgency of finding antidotes for its sluggish economy.

“Our success in the coming years will rely on partnerships with investors in Brazil and all over the world,” Ms. Rousseff said Friday at the World Economic Forum. “My government has taken measures to improve this relationship even more.”

In a half-hour speech, her first to the annual Alpine gathering by the former Marxist guerrilla, Ms. Rousseff reaffirmed her country’s commitment to economic fundamentals like a free-floating currency and fiscal stability, and promised Brazil would become more competitive, hoping to counteract a souring investor perception of her country in recent years.

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Brazil’s Rousseff tries to win over jittery investors at Davos

January 24, 2014

Reuters, 1/24/2014

Brazilian President Dilma Rousseff defended her administration’s management of a struggling economy on Friday though stopped short of offering concrete steps to calm investor nerves in the midst of an emerging market sell-off.

In what aides described as a major speech designed to regain foreign investors’ trust at the World Economic Forum in Davos, Switzerland, Rousseff reiterated a commitment to balanced public finances and inflation targeting amid mounting investor criticism of her administration.

“I want to emphasize that we will not be weak on inflation,” Rousseff said. “On the other hand, fiscal responsibility is a basic principle of our vision for economic and social development.”

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Brazil’s Mantega says inflation to remain priority

January 23, 2014

Reuters, 1/23/2014

Brazilian Finance Minister Guido Mantega said on Thursday that a recent slowdown in price increases in January shows his government is committed to keep inflation under control.

Speaking at a webstreamed press conference from Davos, Switzerland, Mantega said the government has not yet decided on its budget fiscal goal for 2014. Investors are keeping a close eye on the government finances that have quickly deteriorated over the last two years.

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Brazil’s Rousseff heads to Davos for the first time to woo investors

January 21, 2014

Anthony Boadle – Reuters, 1/20/2014

Brazil’s leftist President Dilma Rousseff will try to convince the world’s business elite in Davos this week that her country is still a good investment despite three years of mediocre growth.

The one-time Marxist guerrilla has decided to reach out to the rich and powerful for the first time at the annual World Economic Forum in the Swiss ski resort of Davos to reassure them she is business-friendly and not fiscally profligate.

That is a big turnaround for a leader with a reputation for heavy-handed policies that have squeezed profits of some companies and hurt share prices. Dispelling skepticism about Brazil’s future will be an uphill task as Rousseff plans to seek re-election in October.

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