The coalition of small parties behind Marina Silva are edging closer to supporting Aécio Neves of the pro-business PSDB party in the second round-run-off of Brazil’s presidential election.
The Brazilian Socialist Party, the leading party behind the candidacy of Ms Silva, who dropped out after placing third in the first round of voting on Sunday, on Wednesday became the second grouping in her coalition to say it was opting for Mr Neves.
The party said it would support Mr Neves, who placed second in the first round, on condition that “an agreement would be discussed and signed concerning policies, considering the urgency to create the necessary environment for a new cycle of development”. Continue reading »
Two out of the four BRIC economies of Brazil, Russia, India and China face severe labour shortages as soon as 2020.
“Many emerging markets are reaching the final phase of their demographic peak,” say the authors of a report by Boston Consulting Group which quantifies the extent of potential labour shortages and surpluses globally over the next 16 years.
The danger of a declining work force is well recognised in China, which is already suffering the impact of the one-child-per-family policy, in effect since 1979. BCG estimates that China’s surplus of about 65m workers in 2020 could turn into a shortage of up to 24.5m people by 2030. Recent proposals to ease the one-child policy, if implemented, would have only a limited impact, since children born now would not enter the workforce until after 2030. Continue reading »
Will the consensus on Brazil’s economy never bottom out? For the third week in a row, market economists have cut their outlook for GDP growth this year, to 1.24 per cent, according to a central bank survey. That’s down from 1.44 per cent last week and 1.62 per cent four weeks ago.
The consensus for next year is down, too, to 1.73 per cent, from 1.8 per cent last week and 2 per cent four weeks ago. Continue reading »
Stronger readings in China helped drive a marginal uptick in emerging market (EM) manufacturing activity in May, breaking a declining trend that has lasted for five consecutive months, according to purchasing manager index (PMI) data aggregated by Capital Economics.
The Capital Economics data, which showed an EM manufacturing PMI for May of 50.1 compared to 49.6 in April, coincided with a slight upswing in investment bank sentiment toward the Chinese economy. Nomura raised its China GDP forecast for the year, while Barclays saw a further easing in Beijing’s monetary policy. Continue reading »
April was a pretty subdued month for emerging market manufacturers. But it seems to have been worse for the BRIC countries – especially China, Russia and Brazil (but not for India) – than for smaller EM economies in general. Some countries that thrive on Eurozone demand posted a fairly buoyant performance.
Overall, EM manufacturing’s PMI (purchasing managers index) fell to 49.6 in April, its lowest reading since June last year and the second straight month it has been below 50, which in theory separates contraction from expansion. Continue reading »
Brazilian industrialists might desperately want to be bullish on the economic recovery hopes of neighbouring Argentina, given close trade ties between the two neighbours. But should they be?
If Morgan Stanley is right, Argentina’s hard landing this year may have cut almost a fifth off Brazil’s industrial production growth this year as exports to its neighbour plummeted. Continue reading »
As Mexicans gear up for this weekend’s celebrations of “El Grito” — “The Shout” — of independence, those who keep a close watch on the economy are puffing up their chests thanks to more good news.
The July industrial production figures published by the government on Tuesday showed a 4.9 per cent year-on-year increase. In seasonally adjusted terms, they also grew by 0.5 per cent on June.
Both figures exceeded most analysts’ expectations. They also compared favourably with those of Brazil, where industrial production fell by 1 per cent over the last four weeks and has been slipping faster since then. Continue reading »
Another Monday, another gloomy outlook from the Brazilian central bank’s weekly survey of market economists. GDP growth this year is seen at just 1.64 per cent, down from 1.73 per cent predicted last week and 1.85 per cent four weeks ago (and 4 per cent targeted by the government).
That is a fast adjustment. But hardly surprising. As the puff goes out of commodity prices and domestic consumption, the seriousness of Brazil’s failure to improve productivity is becoming increasingly apparent. Continue reading »
Here’s some much needed good news for Brazil’s ailing manufacturing scene.
Canon, the Japanese camera and optical equipment maker, on Monday announced plans to set up a production factory in the country’s Amazonas state in the northwest. The investment, at ¥210m ($2.6m), is not exactly jaw-dropping. But it is a symbolic vote of confidence in Brazil at a time when investor sentiments are at a low. Continue reading »
At first glance, Brazil’s GDP data on Friday just seemed a bit weird.
Industry, which has long been viewed as the economy’s weak spot, jumped 1.7 per cent in the first quarter from the previous three months. While that may not seem like much for a supposedly ‘booming’ BRIC, it was rather miraculous given that overall GDP rose only 0.2 per cent. Continue reading »
By Iona Texeira Stevens and Joe Leahy in São Paulo
President Dilma Rousseff’s government has returned to the engine room to see if it can get the Brazilian super tanker to sail any faster.
The government has announced another set of stimulus measures – a R$45bn capitalisation of the country’s development bank and about R$5.8bn in tax breaks for its struggling manufacturing base. Continue reading »