Eduardo Porter – The New York Times, 05/03/3016
Not too long ago, Brazilians might have been counted as the most optimistic people in the world. From 2008 to 2013, as the United States and Europe grappled with the aftermath of a crisis wrought by blind trust in unfettered finance, Brazil’s income per person grew 12 percent after inflation. Wages soared. The poverty rate plummeted. Even income inequality narrowed.
Brazil remained only a high-middle-income country, in the technospeak of the International Monetary Fund. But for the first time in forever, the eternal “country of tomorrow,” as Brazilians often ruefully described their nation, saw itself instead as a rampant member of the emerging cohort ofBRICS (Brazil, Russia, India, China and South Africa) — maybe even closer than China to making the jump into the ranks of the world’s richest nations.
And then it didn’t happen.
David Biller – Bloomberg Business, 01/19/2016
Brazil won’t return to growth until at least 2018 after two years of recession and one of stagnation, marking the first time in over a century that Latin America’s largest economy fails to expand for that long, the International Monetary Fund said.
The IMF cut Brazil’s 2017 economic forecast to stagnation from 2.3 percent growth as it updated its World Economic Outlook, last published in October. Gross domestic product will shrink 3.5 percent this year after contracting 3.8 percent in 2015, it said Tuesday. That would be the first time since 1901 that Brazil has back-to-back recessions deeper than 3 percent, according to data from the government’s economic research institute, known as IPEA.
The estimates mean the Washington-based lender is now more pessimistic than all but four of the 23 economists surveyed by Bloomberg, whose median estimate is for Brazil to expand 1 percent next year.
Paulo Trevisani – The Wall Street Journal, 5/12/2015
BRASÍLIA—Brazil’s government needs to implement its plans to improve its financial situation and bring price increases under control to help restore confidence, competitiveness and growth to the economy, the International Monetary Fund said in a report published Tuesday.
“Fiscal consolidation should proceed without delay along the announced lines, while monetary policy should remain tight to bring inflation to target,” the report said.
Finance Minister Joaquim Levy, who took office in January, is pushing spending cuts and higher taxes to plug a budget hole caused by years of costly economic stimulus.
Cihan News Agency, 7/31/2014
Brazilian Minister of Finance Guido Mantega has rebutted a report by the International Monetary Fund (IMF) where it rated Brazil among the emerging economies most vulnerable to external crises. In his remarks on Tuesday (July 29), he said economic indicators for the first half of 2014 show that foreign investors remain interested in the country, in spite of the US Federal Reserve (Fed) tapering its quantitative easing measures. The minister also noted that foreign direct investments – which create jobs in the country – have remained above $60 billion in 12 months for the fourth straight year. Moreover, Mantega said, the Brazilian real appreciated 9.4% in the first semester, and the São Paulo Stock Exchange (BOVESPA) was up 21.25% in the same period.
According to Mantega, the report was prepared by lower echelons of the IMF and repeats the same mistakes of earlier documents disclosed by financial institutions and international organizations that report a “perfect storm” for Brazil’s economy this year and place Brazil among the five weakest emerging countries. “The storm never came, the scenario described by the reports wasn’t fulfilled,” he said.
The minister pointed out that Brazil has the fifth largest international reserves in the world, around $380 billion. The sum exceeds the public and private external debt of $330 billion, enough to see Brazil through for a long time in the event of a shortage in foreign capital.
Carlos Eduardo Lins da Silva – Executive editor of Política Externa, Wilson Center Global Fellow
Its initial landing, projected at US$ 3.6 billion a year starting in 2016, will limit the bank’s impact
The sixth summit of the BRICS took place at a time of low economic growth for the group. The BRICS gained prominence after the global financial crisis of 2008, which put the leading capitalist economies on the brink of the abyss and made room for big emerging countries at the decision making table.
The average growth for the five countries in 2014 is expected to be to around 5%, or half of what was recorded eight years ago, with one important difference: unlike 2008, the large economies are now recovering from higher levels of development when compared with the BRICS.
The group made important institutional progress in its sixth summit, held in the Brazilian city of Fortaleza. The event marked the official launching of the New Development Bank. However, it did not elevate the BRICS to an organization capable of substantially influencing global geopolitics and effectively countering the established economic powers or challenging the apparatus they built after World War II to ensure hegemony in the macroeconomic policy decision making. Continue reading “The New Development Bank adds substance to the BRICS”
Merco Press News, 10/28/2013
Rousseff said Brazil had made progress in several fields in the past few months, since the government announced measures in response to spontaneous anti-government protests in June. One of the government’s pledges at the time, she said, was to ensure fiscal responsibilities.
Finance Minister Guido Mantega also criticized the IMF report as incoherent and probably compiled by technical personnel not very familiar with Brazil’s measures. Mantega said IMF chief economist Olivier Blanchard was much more in tune with the measures implemented in Brazil.
“The IMF evaluation of Brazil’s fiscal policies and debt management is mistaken and should be revised”, Finance Minister Guido Mantega said.
Patricia Rey Mallén – International Business Times, 10/14/2013
As the United States holds its breath waiting for the resolution on the shutdown, so does Latin America. The fiscal crisis that began two weeks ago with the closing of the U.S. government and could culminate in a U.S. debt default in a few days could have disastrous consequences for the United States’ southern neighbors, hurting the currency exchange rates and weakening the region’s growth.
The U.S., still Latin America’s largest trade partner and investor, must decide whether it will raise the debt ceiling, currently at $16.7 trillion, or suspend payments to bondholders. If that were to happen, possibly as soon as October 17, the world economy would suffer another blow, starting in Latin America and the Caribbean.
“The region is in a very complex situation due to the fiscal crisis and the shutdown,” Colombian financial analyst Juan Alberto Pineda told financial newspaper El Economista América. “The signals that are coming out [of Washington] do not look positive for Latin American exports, or an exchange rate that allows the region to compete in global trade.”
Estado de S. Paulo, 09/21/2013
Brazil’s primary budget surplus lost value as an indicator of the situation of the country’s public accounts, assessed economist Teresa Ter-Minassian, who believes the country is in danger of “loosing its fiscal compass” due to the accounting maneuvers used to try to keep the indicator within the official target.
Teresa, former director of fiscal affairs for the IMF, criticized the exclusion of expenses and the use of extraordinary revenues to increase the value of the indicator. “The budget surplus accounts for a universe that is becoming smaller and smaller,” she stated.
Read full article in Portuguese here.
“Brazil’s economy is recovering gradually from the slowdown that began in mid-2011,” the IMF Executive Board said in its annual assessment of the Brazilian economy on Wednesday.
It hailed the Brazilian government for beginning this year ”to focus on alleviating supply-side constraints (including infrastructure bottlenecks) and containing inflationary pressures by tightening monetary policy”.
IMF board stressed that “comprehensive efforts to boost productivity, competitiveness, and investment are critical for raising potential growth”.
Joe Leahy – Financial Times, 08/08/2013
Brazil has called for the IMF-backed rescue programmes for Greece and other southern eurozone countries to be reviewed to make them more economically sustainable.
The call from finance minister Guido Mantega came as he sought to explain Brazil’s stance on Greece’s rescue programme after its IMF representative, Paulo Nogueira Batista, abstained from a vote to approve the latest tranche of help for Athens.
In an interview with the Financial Times on Thursday, Mr Mantega said Brazil believed the International Monetary Fund-backed eurozone programmes needed to be overhauled to make them more realistic. “I think these programmes of fiscal adjustment created by Europe in general are excessive, they are very stringent,” he said.