The Economist, 01/30/2016
JANUARY is a languid month in Brazil. Beyond the hullabaloo at samba schools—practising for their bawdy annual face-off during Carnival, which starts on February 5th—business pauses while Brazilians go on holiday in the scorching southern summer. Fewer cars clog streets; more bodies throng the beaches.
Politicians customarily switch off along with everyone else. Congressmen return from their Christmas break on February 2nd, but will probably do little until after Mardi Gras a week later. Neither they nor the president, Dilma Rousseff, will be able to relax, though. A frightening mosquito-borne disease has put the health authorities on high alert (see page 42). Meanwhile, Brazil’s political and economic crises are deepening. When politicians return to work they may regret the time they took off from attempting to solve them.
Paul Kiernan – The Wall Street Journal, 9/29/2015
Brazil’s national unemployment rate rose sharply in the May to July period and wages declined, as the economy likely continued to deteriorate.
Joblessness rose to 8.6% in May to July from 8% in the previous three-month period and 6.9% a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Tuesday. Average monthly wages fell to 1,881 Brazilian reais, the lowest level, adjusted for inflation, since the September to November period of 2014.
The data released Tuesday were from a new, nationwide unemployment survey, known as PNAD, that the IBGE is currently phasing in. The old survey, which will be phased out after this year, only collected data from six major metropolitan areas.
Brazil‘s economy is gaining force, industrial output is rising and inflation is falling, showing that concerns about the country’s direction are misplaced, Finance Minister Guido Mantega said in the Estado de S. Paulo newspaper on Sunday.
Mantega also said he’s confident that the economy’s solid foundations, bolstered by efforts to cut taxes and spending, will eventually force the Standard and Poor’s rating agency to reverse its decision Thursday to downgrade the outlook for the country’s foreign debt rating to “negative” from “stable.”
“If it depends on the performance of the Brazilian economy, S&P will have to change their outlook,” he said.
Peter Millard – Bloomberg Businessweek, 06/06/2013
Investors in Petroleo Brasileiro SA (PBR), the world’s most indebted oil company, aren’t celebrating Brazil’s biggest-ever crude discovery.
Since regulators doubled estimates for the Libra field to as much as 12 billion barrels on May 23, the state-run company’sshares (PBR) fell 5.3 percent in New York, the worst performance among 15 peers tracked by Bloomberg. The new estimates make the oil prospect Brazil’s largest as the country prepares to bring in partners to start production.
For Petrobras, more oil means more investments and debt for a company that already has the world’s second-biggest spending plan and is stretched for staff and equipment. The Rio de Janeiro-based producer will pay a multi-billion-dollar signing bonus for Libra at a time it sacrifices revenue from fuel sales as part of a government policy to curb inflation. Petrobras has sold imported gasoline and diesel at a loss since late 2010.
Kenneth Rapoza – Forbes, 5/8/2013
Declining food prices helped Brazil’s monthly inflation index fall from 6.59% to 6.49%. It’s not great, but it’s heading in the right direction.
Food inflation services have been the main culprit behind inflation this year, but in April it was health and personal care groups that came in stronger than forecast, printing at 0.96% on the month for healthcare and 1.3% for personal care products. Brazilians love their Nivea and Boticario. The good news is that daily inflation surveys are suggesting that food inflation is moving down at an even faster pace, which means 6.49% won’t be topped in May.
“We see downside risks to inflation for May,” said Guilherme Loureiro, an analyst at Barclays Capital in São Paulo. He said in a note to clients on Wednesday that a temporary downtrend in domestic inflation plus renewed concerns about the global growth outlook, Barclays is still holding out for a 25 basis point rate hike in Brazil to 8.25%. That’ll happen mid-month if their analysis is right.
The Economist, 04/20/2013
A CENTRAL bank knows it has lost control of inflation expectations when price rises become the subject of running gags. In Brazil the jokes feature tomatoes, which have suddenly become very pricey following floods, droughts and a big increase in freight costs. Social-media sites buzz with cartoons of bank robbers making off with crates of tomatoes and lottery winners bathing in purée. Even organised crime is diversifying into fruit: customs officers say that Paraguayan smugglers have added Argentine tomatoes to their Brazil-bound trade in drugs, cigarettes and knock-off electronics.
Official figures published on April 10th show that Brazil’s inflation problem goes well beyond salad. Prices rose by 6.6% during the past year, breaching the two-point tolerance band around the Central Bank’s 4.5% target. The price of more than two-thirds of the items used to calculate inflation rose in the past month. Now the mockery seems to have spurred the bank to act. On April 17th it raised the base interest-rate by 0.25 points, to 7.5%. Market watchers expect rates to hit 8.5% by the year’s end.
The belated rise comes just as it has sunk in that Brazil’s economy is failing to regain momentum after stalling last year. Fewer new jobs are being created. Industrial production and an economic-activity index widely seen as a leading indicator of GDP growth both fell in February after rising in January. Core retail sales fell for the first time in almost a decade, a particularly worrying sign given that only domestic consumption kept Brazil out of recession in 2012.