Tyler Cowen – Bloomberg, 08/11/2016
Brazil, it is often and not quite fairly said, is the country of the future and always will be. As the Olympics focuses global attention on the country, it’s worth exploring the various ways in which this maxim is — and may not be — true.
The puzzle with Brazil is neither its successes nor its failures, but rather the combination of the two. The country has such a dynamic feel, and in the postwar era it saw many years of double-digit economic growth. The Economist featured the country on its cover in 2009 as the next miracle take-off, and in 2012 Germany’s Der Spiegel published a long article titled “How Good Governance Made Brazil a Model Nation.”
Yet Brazil never caught up to the developed world: Its gross domestic product per capita falls about 4 to 7 times short of the U.S. — about where it was more than a century ago. It is now experiencing one of the most severe depressions of any country in modern times. The president, Dilma Rousseff, is in the midst of an impeachment process. The combination of corrupt and violent police, muggings of athletes, polluted water and inadequate facilities have led many to wonder whether Brazil can pull of the Olympics without major embarrassment.
Kenneth Rapoza – Forbes, 06/27/2016
A technical report into whether or not Dilma cooked the books on fiscal accounts in 2014 turned out in her favor. Come to find out, she did not push forward accounts, but still — according to one Brazil economist I spoke with — did commit crimes of fiscal responsibility. That will still be for the Senate to decide when suspended president Dilma Rousseff goes to trial at some point in late July, early August.
What appears clear for Brazil watchers is that the back and forth of corruption allegations and now this latest study suggests that if the country was a chicken, it would be running around with its head cut off. It’s not very appealing except for the hungriest of vultures looking for a cheap meal.
Hedge funds that like regime change politics are watching the political play-by-play closely. The latest study might have moved the needle against impeachment, though 60 senators are still expected to vote for her ouster.
Brian Winter – Reuters, 01/04/2011
President Dilma Rousseff’s new government moved immediately on Monday to tackle the biggest threats to Brazil’s booming economy, vowing new budget cuts, measures to deal with an overvalued currency, and even a tougher line in trade talks with China.
The first business day in office for Rousseff, 63, signaled a clearly market-friendly tone, as the pragmatic leftist knows she’ll need Wall Street’s support — and money — to make good on her ambitious goals of ending extreme poverty and expanding Brazil’s woeful infrastructure in the next four years.
Planning Minister Miriam Belchior said Rousseff would “listen carefully to the market’s concerns” and make necessary cuts to rein in a burst of government spending that has fueled a potentially dangerous rise in inflation.
Maria Luiza Rabello and Andre Solian – Bloomberg, 12/23/2010
Brazil’s congress, with the support of President-elect Dilma Rousseff’s team, approved a 5.9 percent increase in the minimum wage, resisting pressure from labor leaders for a bigger rise and signaling her commitment to contain public spending next year.
Lawmakers approved last night the 2011 budget bill, which lifts the monthly minimum wage to 540 reais ($318). Unions were seeking a 14 percent increase. The country’s benchmark inflation index is expected to rise 5.9 percent this year, according to central bank estimates.
Policy makers are counting on a tighter fiscal policy next year to help rein in inflation, which quickened to a 23-month high in mid-December, according to the central bank’s quarterly inflation report published yesterday. Finance Minister Guido Mantega, who will continue in his post when Rousseff takes office on Jan. 1, said in a Nov. 30 interview the government will freeze at least 20 billion reais of the 2011 budget to help ease demand.
Carla Simoes and ALexander Cuadros – Bloomberg Businessweek, 11/01/2010
Brazilian President-elect Dilma Rousseff spoke with her U.S. counterpart Barack Obama today to discuss Brazil’s foreign policy and energy cooperation between the two countries, Rousseff’s foreign policy adviser Marco Aurelio Garcia told reporters in Brasilia today.
Brazil’s next leader also spoke with Venezuelan President Hugo Chavez, Mexican President Felipe Calderon and Argentine President Cristina Fernandez de Kirchner, and met with allies including former Finance Minister Antonio Palocci to discuss her transition to power, Garcia said.
Rousseff won 56 percent of the vote yesterday compared with 44 percent for Jose Serra, the former governor of Sao Paulo state.
The yield on the January 2014 interest-futures contract fell 11 basis points, or 0.11 percentage point, to 11.560 percent at 3:56 p.m. New York time, after Rousseff pledged to maintain a lid on spending in her victory speech last night.
Ana Nicolaci da Costa- Reuters, 08/31/2010
Election debates in many countries revolve around health care, education, and foreign policy. In Brazil, monetary policy is taking center stage.
That reflects how deeply runaway inflation scarred the country’s national psyche in the 1980s and 1990s. Any Brazilian living back then remembers only too well having to rush to the supermarket before the prices doubled before their eyes.
These days they have to cope with some of the world’s highest interest rates that make loans eye-wateringly expensive and crimp investment in Latin America’s biggest economy.
Both presidential candidates have vowed to maintain the central bank’s de facto autonomy in the next government. Front-runner Dilma Rousseff of the ruling party has been careful to show her support for the central bank. However, there is speculation the bank faced some political pressure for lower rates in the current government in which Rousseff was cabinet chief.
Gerald Jeffris- The Wall Street Journal, 08/30/2010
BRASILIA (Dow Jones)–Brazil’s government-backed candidate Dilma Rousseff will not carry out an adjustment to the federal budget next year if elected to the country’s presidency, the candidate said Monday, according to the Estado news agency.
Speaking at a press conference in Sao Paulo, Rousseff denied the validity of recent local press reports that have suggested her advisers are preparing budget restrictions.
“I’m not going to carry out a fiscal adjustment under any circumstances,” she said. “Brazil doesn’t need a fiscal adjustment.”
Inter-American Dialogue Policy Brief, June 2010
Good fiscal policy not only promotes macroeconomic stability and growth, it is also a powerful tool for directly reducing poverty and inequality. Many governments around the world have raised and spent funds to build the assets of the poor and to directly redistribute income, successfully improving welfare and constructing more prosperous and equal societies.
Unfortunately, fiscal policy in Latin America does not have a good record of reducing poverty and inequality. Why? According to the best information available, the combination of inadequate revenues, low-quality services and poor targeting helps explain why poverty has declined so slowly and why inequality has remained extraordinarily high.
The frontrunner in Brazil’s presidential race plans to slash public spending and may lower the country’s inflation target if she is elected in October, Folha de S.Paulo newspaper reported on Monday.
Dilma Rousseff of the ruling Workers’ Party already is making plans for her first months in office with an eye on shoring up her pro-market credentials with investors, Folha said, citing unnamed sources close to her campaign.
With public spending rising faster than federal tax revenues, Brazil’s primary budget surplus — which excludes interest payments on debt obligations — is running well below the government’s year-end target of 3.3 percent of gross domestic product.
Brazil’s tax collection and job creation results for June were below economists’ forecasts, signaling growth has slowed since the economy expanded at the fastest pace in 15 years in the first quarter.
Brazil’s economy created 212,952 government-registered jobs in June, less than the median of three forecasts of economists surveyed by Bloomberg for 279,000 jobs. The figures compare with 298,041 registered jobs created in May, the Labor Ministry said in a report distributed today in Brasilia.
The government collected 61.5 billion reais ($35 billion) in taxes last month, missing the 64 billion-real median forecast of 11 economists surveyed by Bloomberg. The figures compare with 54 billion reais in the same month last year, the tax agency said in a report distributed today in Brasilia.