Brazil Finance Minister Mantega: inflation control a priority

Paulo Trevisani & Paulo Winterstein – Fox Business, 02/26/2013

Brazil Finance Minister Guido Mantega said Tuesday that inflation control is a  priority and so despite a slowdown in inflation the government won’t be  complacent in monitoring prices.

“Inflation control is a priority . . . so we will never relax with inflation  control,” Mr. Mantega said during a presentation to investors in New York.

“Inflation is slowing down but we will not be lax,” he said, citing the IPC  consumer price index, which slowed yet again during the third week of  February.

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Consumption-led growth reaches its limits in Brazil

Reuters, 6/10/12

For many Brazilian executives, it was a day from hell. Last Friday, Brazil’s statistics agency published data showing the economy grew just 0.2 percent from January to March, marking a third consecutive quarter of stagnation – a shock for a country that only recently was booming.

Later in the day, São Paulo was brought to its knees by what city authorities described as its worst-ever traffic jam, with more than 295km of clogged roadways snaking through Brazil’s business capital and some furious commuters needing more than four hours to get home.

The symbolism was inescapable: Brazil has done a superb job of building and selling cars in recent years, but failed to build enough roads to accommodate them. Similarly, the economy as a whole has depended too much on stoking consumer demand and not enough on increasing supply by way of investment, resulting in terrible bottlenecks that have left Brazil at a standstill.

Some of Brazil’s top business leaders, speaking at a Reuters Latin America Investment Summit, said the demand-led model had probably run its course. They said that for Brazil to break out of its current logjam of annual growth rates below 3 percent, President Dilma Rousseff’s government would have to take bolder – and more difficult – steps to improve infrastructure and create a better investment climate.

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Brazil minimum-wage fight may derail Rousseff’s austerity drive

Iuri Dantas – Bloomberg, 02/04/2011

Brazilian unions meet with one of President Dilma Rousseff’s top aides today in pursuit of their demand for a bigger minimum wage increase than she has endorsed as she fights to contain already overstretched public spending.

The country’s monthly minimum wage rose 62 percent in real terms under Rousseff’s predecessor, former metalworker Luiz Inacio Lula da Silva, and she favors lifting it an additional 6.8 percent this year to 545 reais ($327) using a formula set by the unions and Lula in 2006. The unions want a boost to 580 reais.

If Rousseff yields, it could derail her plans to curb spending needed to cool inflation running at a two-year high and bring down the second-highest real interest rates in the Group of 20. Under the formula, which is tied to inflation plus economic growth of two years prior, spending is already set to increase 10 billion reais this year because pension benefits are indexed to the wage. A bigger headache waits in 2012 when the wage adjustment may boost spending by 20 billion reais.

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Brazil’s Dilma Rousseff faces tough presidential task

BBC News, 01/01/2011

With the inauguration on 1 January of Dilma Rousseff, a 63-year-old economist with unproven political skills, Brazil has its first woman president.  PAULO SOTERO , director of the Brazil Institute at the Woodrow Wilson International Center for Scholars, looks at the challenges she faces in governing Latin America’s biggest nation.

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Transport hampers Brazil’s booming farms

Jonathan Wheatley-Financial Times, 11/15/09
José Nardes stands in a field of 20-day-old soya on his farm near Primaveira do Leste in the central Brazilian state of Mato Grosso.

As far as the distant horizons, over gently undulating countryside, the young plants are interspersed with stretches of cerrado, the scrubby woodland that once covered the entire region. Today, farmers must preserve what remains, often as protection for the rivers that cross the plateau, heading north to the Amazon basin, and which are one reason for its fertility. “This is the marvel of Mato Grosso,” Mr Nardes says. “When foreigners come here they can’t believe how much we get out of the soil.”

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