Some good news at last for the beleaguered Brazilian government: GDP growth in 2014 was 2.3 per cent, including 0.7 per cent in the fourth quarter, beating surveys by Reuters and Bloomberg which both had a consensus for 0.3 per cent in Q4.
Among those heaving sighs of relief will be the central bank, whose widely-followed GDP indicator, the IBC-Br, had suggested a marginal contraction in activity in the fourth quarter, which would have put Brazil into a technical recession (two consecutive quarters of contraction). Continue reading »
“But you are Brazilian!” – after I rejected a sexual advance.
That’s what it says on the card above, one of several used in a campaign to report discrimination suffered by Brazilian students at the University of Coimbra in Portugal. Continue reading »
In recent weeks, social media in Brazil has been abuzz with talk of the rise of a new breed of vigilantes or justiceiros in society.
With the World Cup later this year, and the summer Olympics in Rio in 2016, overseas visitors will naturally be concerned with their safety. However, the sort of treatment being meted out by citizens rather than officials may do more harm than good for Brazil’s image. Continue reading »
Russian potash producer Uralkali has decided to invest in port infrastructure in Brazil in a move to bolster its position in the world’s fastest growing fertilizer market.
In a statement on Friday, Uralkali said it had acquired a 25 per cent of Equiplan Participaceos, the main shareholder in Terminais Portuarios da Ponta do Felix, a terminal in the city of Antonina on Brazil’s southern coast. Continue reading »
Ouch. This isn’t any old deficit – Brazil has just registered its worst month ever, in terms of trade. Imports outweighed exports by $4.06bn in January, despite a weaker real that should, in theory, be giving a boost to exports.
But how bad is it really? Beyondbrics had a quick dig into the numbers. Continue reading »
It would be exaggerated to call Davos the “money Oscars”, as Jon Stewart did on the Daily Show. But this year, WEF participants did like to think of countries as winners or losers, especially among emerging markets. In this last roundup, beyondbrics summarises who, to paraphrase the FT, “was hot – and who decidedly not.”
Continue reading »
As investors scramble to make sense of the sell-off in emerging markets in the past few days, they will be keen to spot any signs of external vulnerability. One item worth looking at is the amount of lending by foreign banks into emerging economies.
Brazil is a case in point. Its external liabilities to global banks have almost quadrupled over the past decade, from about $50bn in 2005 to almost $200bn last year, according to the Bank for International Settlements.
How worrying is this? Continue reading »
The Arena das Dunas World Cup stadium in Natal, in northeast Brazil shimmers in the late afternoon sun. It looks a bit like a giant silver-plated armadillo or, as one local put it, like a spaceship that’s crash-landed in the middle of the city.
President Dilma Rousseff stopped off here this week, en route to the World Economic Forum in Davos, for the stadium’s inauguration. It has come in on budget, according to the government, at around R$400m, so Rousseff was keen to big it up. Continue reading »
If investing is all about value creation, the latest batch of figures from Brazil’s central bank make for sobering reading. They show the rich returns you can make when investing in Brazil goes right – and the huge losses that result when it goes wrong. Over the past three years, foreign direct investors and buyers of Brazilian portfolio assets have suffered value destruction on a colossal scale.
An analysis of central bank figures by beyondbrics shows that ,taken together, flows of foreign direct investment to Brazil and foreign investment in Brazilian portfolio assets were worth more than $260bn between January 2011 and November 2013. Over the same period, in spite of those inflows, the value of such assets held by foreigners fell from $1,351bn to $1,327bn, a loss of $24bn, implying value destruction of more than $284bn in less than three years. Continue reading »
By Paulo Sotero of the Woodrow Wilson Center
Low expectation is the best thing going for Dilma Rousseff as she prepares for her first appearance as Brazil’s president at the annual conclave of global business leaders in Davos this week. Her absence from the World Economic Forum over the past three years was explained by officials in Brasília as a political decision, indicative of her low regard for the annual assembly of the masters of globalization. Things have changed. Continue reading »
Brazil’s economic growth continues to disappoint.
After data in December showed Brazil’s economy shrank in the third quarter of last year for the first time since 2009, the central bank’s IBC-Br index, a monthly proxy for gross domestic product, on Friday showed economic activity fell 0.3 per cent in November from a month earlier. Continue reading »
Imagine you’re Brazil’s central bank president, Alexandre Tombini.
It’s an election year and your boss is Dilma Rousseff. Growth is slowing and high interest rates are boosting debt servicing costs for voters who are up to their eyeballs in debt. Continue reading »
How well protected is Brazil against external shocks? Perhaps not as well as is commonly thought.
It has been a proud boast of Brasília for several years that it is a net creditor to the world because it holds more in foreign exchange reserves than it owes in overseas debt. However, it is far from clear that this is still the case. The issue is just one example of the vulnerabilities investors must include in their calculations of how Brazil and other emerging markets will fare as monetary policy in the developed world becomes less accommodating. Continue reading »
The Eike Batista yard sale is not over just yet, it seems.
Brazil’s former richest man is expected to conclude as early as this week the sale of his 33 per cent stake in the country’s treasured semiconductor venture, SIX Semicondutores. The buyer is Argentine billionaire Eduardo Eurnekian, head of the holding company Corporación América. Corporación América confirmed it was in the final stages of buying the stake after Eurnekian visited the site of the half-finished semiconductor plant in Brazil’s Minas Gerais state on Monday. Eike’s EBX group did not respond to requests for comment. Continue reading »
It’s been another record-breaking day for Brazil, but not in a good way. After data on Tuesday showed car sales fell in 2013 for the first time in a decade, a report from Brazil’s central bank on Wednesday showed the country also recorded the biggest dollar outflow in over 10 years.
Net dollar outflows totalled $12.26bn last year – the largest exit of dollars since 2002 when the election of leftist President Luiz Inácio Lula da Silva caused investors to flee the country. Continue reading »