Brazil’s budget hole widens in June

Paulo Trevisani – The Wall Street Journal, 7/31/2015

Brazil announced Friday another setback to government efforts to increase savings and balance its books amid a deep economic contraction.

The government posted a 9.3 billion Brazilian reais ($2.8 billion) primary deficit in June, the country’s central bank said. That compares with a primary deficit of 6.9 billion reais in May and brings the 12-month result to a 45.7 billion reais deficit, equal to 0.8% of gross domestic product. This year’s target is a surplus 0.15% of GDP.

“It is a bad result,” said João Pedro Brugger, an economist at Leme Investimentos, an asset-management firm in São Paulo. “The government will have to make additional efforts to meet its target,” something particularly difficult when the economy is weak, he said.

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Nigeria lags behind Brazil, South Africa in telecoms investment per capita

Business Day, 7/21/2014

With more than 127 million active mobile subscriptions in Nigeria, Africa’s largest economy by GDP significantly lags behind fast growing economies of Brazil and South Africa in terms of telecommunications investment per capita, industry analysts have said.

According to World Bank, Nigeria invested an estimated $6.6 billion in telecoms infrastructure from 2010 through 2012, which works out to a total of about $40 per person. Brazil, on the other hand, has a telecoms investment per capita of $167. Between 2010 and 2012, Brazil and South Africa spent about $127 and $62 more per person, respectively, on telecoms infrastructure. As at March 2014, Brazil has a mobile subscription base of 273 million.

The country has a population of 201 million people. South Africa, on the other hand, has a mobile subscription base of 59.4 million. The country has a population of about 50 million people, according to the 2013 GSM African Mobile Observatory report.

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Mantega plans 20% cut in Brazil BNDES loans to slow deficit

Adriana Arai, Marisa Castellani & Arnaldo Galvao – Bloomberg, 11/04/2013

Brazil plans to reduce lending by its development bank by about 20 percent next year to shore up finances after posting the biggest budget deficit in almost four years, fueling speculation the nation’s credit rating may be cut. Local swap rates fell.

Finance Minister Guido Mantega said in an interview that state lender BNDES will provide about 150 billion reais ($66.6 billion) in new loans in 2014, compared with an estimated 190 billion reais this year. That would bring BNDES credit a little below 2012 levels. The government will freeze BNDES lending to states and municipalities, unwind tax breaks on consumer goods and keep current expenditures under control, the minister said.

“With respect to state banks, we will reduce stimulus,” Mantega said at his Sao Paulo office on Nov. 1. Lending “will be more focused and we will reduce subsidies.”

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Brazil analysts cut 2013 GDP forecast, raise inflation call

David Biller – Bloomberg Businessweek, 01/07/2013

Analysts covering Brazil lowered their forecast for growth this year and raised it for inflation, as the world’s second-biggest emerging market struggles to rebound from a slowdown that has lasted more than a year.

Brazil’s gross domestic product will expand 3.26 percent this year, according to the median estimate in a central bank survey of about 100 analysts published today, down from 3.3 percent the previous week. Inflation this year will reach 5.49 percent, up from the previous week’s estimate of 5.47 percent. Economists also boosted their 2012 inflation forecast for the fifth straight week to 5.73 percent from the previous estimate of 5.71 percent, the survey showed.

President Dilma Rousseff’s administration has injected a series of stimuli into Brazil’s $2.5 trillion economy, which economists forecast will grow this year the slowest among the BRIC group, which includes Russia, India and China. Meanwhile the central bank has cut the benchmark Selic rate by 525 basis points, the most of any Group of 20 nation, to a record 7.25 percent.

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Economists see Brazil economy growing less than 1 percent in 2012

Reuters, 12/31/2012

Economists cut their estimates for economic growth in Brazil to 0.98 percent this year, a central bank survey showed on Monday, highlighting the sharp slowdown of an economy that just a couple of years ago was an emerging market star.

The world’s No. 6 economy was expected to grow 1.0 percent this year in a poll released last week, a far cry from the 3.30 percent expansion predicted by economists surveyed by the central bank at the start of the year.

Still, economists see the Brazilian economy rebounding to grow 3.30 percent in 2013 after an avalanche of stimulus measures by the government of President Dilma Rousseff that includes dozens of tax breaks and subsidized loans.

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Economists trim Brazil GDP growth view for fifth week

Silvio Cascione – Reuters, 12/17/2012

Economists trimmed forecasts for Brazil‘s economic growth this year and next for the fifth straight week, a central bank survey showed on Monday.

The largest Latin American economy — and one of the fastest growing countries only two years ago — is now expected to expand just 1.00 percent this year, down from 1.03 percent seen in the prior week, according to the poll’s median forecasts.

Brazilian businesses have suffered from lacklustre investment levels, rising labour costs and a heavy tax burden. President Dilma Rousseff has offered several stimulus measures over the past year and according to media reports is studying further steps to revive growth.

Amid slowdown, Brazil turns inward

Howard Schneider – The Washington Post , 12/03/2012

When the Brazilian economy began to stall last year, officials in Latin America’s largest country started pulling pages from the playbook of another major developing nation: China.

They hiked tariffs on dozens of industrial products, limited imports of auto parts, and capped how many automobiles could come into the country from Mexico — an indirect slap at the U.S. companies that assemble many vehicles there.

A large state-funded bank grew larger, steering cheap money to projects that rely on locally made goods and equipment rather than imports. Other rules and tax breaks for local products proliferated under President Dilma Rousseff’s “Bigger Brazil Program.” The latest statistics show continued sluggishness, with Brazil growing at an annual rate of about 2.4 percent, less than the United States.

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