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Another week and yet another contraction in the consensus for GDP growth in Brazil this year. The central bank’s latest weekly survey of market economists has notched up its 14th consecutive week of falling forecasts and now predicts growth of just 0.52 per cent this year – which may even sound optimistic to some after last week’s figures showing the economy was in recession during the first half. Continue reading »

Brazil’s economy is, by the standard definition, in recession. Its GDP contracted 0.6 per cent in the second quarter from the first, while the first quarter figure was revised to a contraction of 0.2 per cent form the previously reported 0.2 per cent growth.

The year on year figures were even worse: a 0.9 per cent contraction compared with the second quarter of 2013. Still, as Joe Leahy reported for fast FT, employment seems to holding up so the performance of the economy may not completely derail President Dilma Rousseff’s chances of re-election in October. Continue reading »

By Márcio Garcia of PUC-Rio

Last year’s taper tantrum caused massive turbulence in global markets. Risky assets suffered greatly and many emerging markets currencies depreciated heavily, including the Brazilian real.

In response, the Brazilian central bank (BCB) decided to intervene in the foreign exchange markets. After an ad hoc beginning, from August 2013 the BCB announced a programme of sales of $2bn of exchange rate swaps every week, plus a weekly auction of $1bn in short term dollar credit lines to the banks. Continue reading »

“Anyone who says that Africa is missing the Millennium Development Goals is missing the point.” You might expect such a tart statement about a canonical organising principle of development policy to come from one of the aid industry’s many curmudgeonly sceptics.

That it came instead from Jan Vandemoortele, a Belgian economist who helped create the United Nations MDGs in the first place, raises questions whether propagating a single set of targets to drive government policy across the entire developing and emerging world is worth doing at all. The “sustainable development goals”, successors to the MDGs, are currently being developed, but the unfortunate signs are that they will be yet more complex and yet less meaningful than the originals.

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Dilma Rousseff is an impressive woman. Under Brazil’s military dictatorship she was held in prison for three years, where she was beaten, tortured with electric shocks and hung upside down for long periods of time. After rebuilding her life, she was elected the first female president in Brazilian history in 2010, setting an example for generations of women to come.

However, in her first official campaign video ahead of October’s elections this week, Dilma has been reincarnated as a…housewife. Continue reading »

If anyone had any doubts about the political significance of the tragic plane crash that killed presidential candidate Eduardo Campos last week, they only need to see the results of Monday’s Datafolha poll.

Marina Silva, who is set to take over as candidate for the Brazilian Socialist party (PSB), attracted over twice as much support as Mr Campos did before he died and now stands a real chance of winning October’s elections. Continue reading »

Eduardo Campos, the Brazilian presidential candidate killed in an air crash on Wednesday, paid a visit to the FT in London at the end of last year. He met the editor and a dozen other journalists and left an impression of a man who had a clear view of the challenges facing Brazil and of the means to tackle them. In that respect, he was a rarity among Brazilian politicians. He will be sorely missed. Continue reading »

The weekly survey of market economists by Brazil’s central bank is becoming the economic equivalent of a limbo dance: each time around, just that little bit lower. This week’s edition has GDP growth in 2014 coming it at just 0.81 per cent, making 11 consecutive weeks of contraction. The outlook for 2015, which had been unchanged for five weeks at 1.5 per cent, has also come down, to 1.2 per cent.

Voters, though, don’t seem to be bothered. Continue reading »

How much lower can it go? The consensus on Brazil’s economic growth this year has been revised downwards for nine successive weeks, according to the central bank’s latest survey of market economists, and now stands at a meagre 0.9 per cent.

The consensus on growth next year is not much better, at 1.5 per cent. As our chart shows, estimates of growth this year (the black line) and next have been in decline for the past 12 months. (Longer, in fact. When the bank first asked economists about growth in 2014, they expected it to come in at 3.8 per cent.) Continue reading »

Israel and Brazil are locked in a diplomatic spat after Latin America’s biggest country issued a statement condemning Benjamin Netanyahu’s government for using “disproportional” force in Gaza but failed to mention the role of Hamas in the conflict.

An Israeli spokesperson called Brazil a diplomatic dwarf and described it as irrelevant in terms of international diplomacy. Continue reading »

Until recently, common wisdom on Brazil’s presidential election was overwhelmingly that it was president Dilma Rousseff’s to lose.

Now, however, the signs that the incumbent may have to scramble to avoid having a second-term slip from her grasp are coming harder and faster. Continue reading »

Brazilian inflation broke the upper bound of the government’s target range in the first half of July, reaching an annual rate of 6.51 per cent according to the statistics office IBGE. It looks set to stay high until the country’s elections in October, putting further pressure on the candidacy of Dilma Rousseff, seeking re-election as president.

The half-monthly figures presented by the IBGE are not seasonally adjusted. But Neil Shearing at Capital Economics reckons they show a clear tendency to take annual inflation to 6.6 per cent for the full month, up from 6.5 per cent in June. Continue reading »

Brazil’s humiliating 7-1 loss to Germany in the World Cup semi-finals was bad enough but now it looks like the country’s economy may also be heading for a similarly crushing defeat. While annual inflation is creeping up towards 7 per cent, most economists now forecast GDP growth this year of little more than 1 per cent.

Faced with this gloomy scenario, Brazil’s central bank will have little choice but to do precisely nothing at its interest rate meeting this week. Continue reading »

After the excruciating manner with which the seleção, Brazil’s national team, was ejected from the World Cup this week, the mood in the country has changed.

As the final looms on Sunday, Brazilians are beginning to reflect on the lessons from the event, with plenty of food for thought. One of the less savoury messages is what the event has told us about the distorted image of Brazil abroad in terms of women and sex. Continue reading »

Luiz Felipe Scolari

Historic humiliation! Historic disgrace! Historic defeat! Worst in 94 years!

The headlines across Brazil’s newspapers on Tuesday night left no doubt: the country’s devastating 7-1 loss to Germany in the World Cup semi-finals will make Brazilians wince for generations.

There was little anger, few accusations and – perhaps surprisingly – barely any mention of Brazil’s absent star player Neymar or the Colombian defender Juan Zúñiga who broke the Brazilian’s back last week and took him out of the tournament. Instead, the mood was solely of utter despair.

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