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.
Michale O’Boyle and Bruno Federowski – Reuters, 07/13/2016
Foreign investors in Latin America are warming to Brazil as a promising turnaround bet while souring on Mexico and its landmark energy reform that has yet to deliver.
Brazil has yet to recover from its worst recession in decades, inflation and interest rates remain among the highest in the region and it is saddled with a bloated public sector. In contrast, Mexico’s economy is growing at around 2 percent, has lower fiscal deficits and sounder public finances.
But while Brazil interim president Michel Temer’s reform agenda offers some promise, Mexico, once a darling of foreign investors, is now a source of disappointment. A slump in oil prices dashed hopes that President Enrique Pena Nieto’s energy sector opening in 2013 along with telecoms and banking reforms would boost foreign investment and supercharge growth while clouds are now gathering over its budget and economy.
Julia Leite & Paula Samba – Bloomberg, 06/27/2016
Brazil is winning over derivatives traders as Acting President Michel Temer seeks to repair the nation’s finances.
The cost to hedge against losses in Brazil’s bonds with credit-default swaps has tumbled by almost a third in the past six months, the biggest drop among the world’s major economies. Prices of the swaps are also now back to levels that prevailed before S&P Global Ratings cut the country’s rating to junk in September.
The turnaround is part of a rebound in Brazil’s financial assets this year fueled by the removal of President Dilma Rousseff from office while she faces an impeachment trial. Since taking the reins last month, Temer has proposed spending caps to help shrink a near-record budget deficit and struck a deal to ease a fiscal crisis roiling Brazilian states amid the longest recession in more than a century.
Ideia Inteligencia, 06/09/2016
Survey published by Ideia Inteligencia on Brazilian public opinion of Acting President Michel Temer’s first few weeks to be presented on June 9th 2016 at the Brazil Institute.
public-perception – Temer first month
Nick Miroff – The Washington Post, 04/22/2016
If you caught a glimpse of last weekend’s impeachment proceedings against President Dilma Rousseff, you may have noticed that Brazil is going bonkers right now. There was spitting, shoving and confetti-shooting on the floor of parliament, which at times looked more like a Roman coliseum than a legislative chamber.
Rousseff lost the vote badly, setting up what is likely to be a protracted, bitter political battle to unseat her. She will be forced to step down temporarily if Brazil’s senate votes as soon as mid-May to go forward with the impeachment process, with hearings that could drag on for six months.
The country of 200 million people, by far the largest in Latin America, is increasingly polarized and entirely consumed with its political crisis. By no means is Brazil on the verge of collapse, but here are some reasons why the turmoil isn’t so good for the rest of us.
Jackie Wattles – CNN Money, 04/04/2016
With just half of tickets sold and only four months before kickoff, Brazil’s new minister of sports, Ricardo Leyser, is looking into ways to boost ticket sales.
He told Brazilian newspaper Folha that the Brazilian government may purchase tickets that will be distributed to public schools. He said public officials must also work to boost worldwide confidence in Rio’s ability to host the games and ensure travelers’ safety.
They’ll have to work to ease fears over more than one issue.
Jonathan Watts – The Guardian, 03/13/2016
More than a million Brazilians have joined anti-government rallies across the country, ramping up the pressure on embattled president Dilma Rousseff.
Already struggling with an impeachment challenge, the worst recession in a century and the biggest corruption scandal in Brazil’s history, the Workers party leader was given another reason to doubt she will complete her four-year term.
The demonstrations on Sunday – which reached all 26 states and the federal district – were expected to be bigger than similar rallies last year. The largest took place in São Paulo, where the polling company Datafolha estimated the crowd at 450,000, more than double the number it registered last year.
Dom Phillips – The Washington Post, 9/16/2015
Rodrigo Muchinelli, owner of a computer sales and repair store in Rio, said his business was in the red for the first three months of this year and is still limping. “It is a fight, daily,” said the 38-year-old businessman.
Laercio Soares closed a lucrative deal with a Rio samba school for his embroidery company in December. He used the money to close a family business whose workforce had fallen from 60 to eight. “We saw the perspective was bad,” said Soares, 65. “That’s why we took this drastic decision.”
He was proved right. Brazil’s economy is tanking — and it’s not just China, its principal trade partner, that is to blame. South America’s biggest economy fell into recession in August and is expected to shrink by 2 to 3 percent this year. Inflation is pushing 10 percent, its highest since 2003, unemployment has climbed to over 8 percent, and the Brazilian real has lost about a third of its value against the dollar this year.
John Paul Rathbone – Financial Times, 9/8/2015
The president may be impeached as part of a corruption scandal, the economy is in recession, unemployment is rising, the currency has collapsed and local interest rates have been jacked up to quash inflation. The last thing that Brazil needs is higher US interest rates as well — even if most Brazilians have more pressing domestic concerns on their mind.
“It’s crazy. Brazil is back to the past again. It’s broken. We can’t even think about getting into overdraft,” said Raul Shinohara, a 61-year-old engineer, lamenting that his credit card charges an annual rate of 372 per cent.
“I hope things get better because if they don’t, it is going to get complicated,” added Maria Lucia Santos, a 58-year-old state sector employee, as she window-shopped in São Paulo.
Mario Sergio Lima and Matthew Malinowski – Bloomberg Business, 8/17/2015
Brazil analysts forecast that Brazil’s economy faces two straight years of recession for the first time since the Great Depression.
Brazil’s economy will shrink by 2.01 percent in 2015 and by 0.15 percent in 2016, according to the Aug. 14 central bank survey of about 100 analysts. That marks their first forecast for recession next year and compares with the previous week’s predictions of a decline of 1.97 percent in 2015 and flat growth in 2016. The last time the economy shrank for two straight years was in 1930-31.
President Dilma Rousseff is struggling to balance policies aimed at taming the fastest inflation in over a decade while reviving economic growth amid a massive corruption scandal that has complicated relations with Congress. Moody’s Investors Service this month became the second ratings company to cut the country’s sovereign credit rating to the cusp of junk. Protests on Sunday that drew half a million people into the streets will maintain the pressure on a government with record-low popularity ratings.