By Monica Baumgarten de Bolle of the Woodrow Wilson Center for International Scholars
President Dilma Rousseff’s soon to be announced new finance minister may mark an important shift in Brazil’s faltering macroeconomic framework: From the ill-fated experimentalism that culminated in the so-called “New Economic Matrix”, brain child of Minister Guido Mantega, to newfound orthodoxy. From a failed model based more on ideology than economics to more rational policymaking, this is what one should expect from Joaquim Levy’s appointment, widely expected to be confirmed on Thursday. How long it all lasts is another matter altogether. Read more
It was close, but they didn’t make it. The political fixers of Brazil’s government had hoped to push through a bill on Wednesday that would have removed its obligation to meet a target of a primary fiscal surplus (before debt payments) of 1.9 per cent of GDP in this year’s budget.
The hope was that the bill would have been passed in time for the expected announcement on Thursday of a new economics team, widely tipped to be led by Joaquim Levy as finance minister. Success would, in a way, have swept out the old team’s jiggery pokery over public accounts before ushering in the new brooms of team Levy. Now it will just have to be done after the event. Read more
Is Brazil’s Workers’ Party, victorious in last month’s elections, ready to back any decision by President Dilma Rousseff to hire Joaquim Levy as finance minister?
Speculation over his likely appointment leaked last Friday into local media, sending financial markets higher.
With a doctorate in economics from the University of Chicago and a previous successful stint as treasury secretary under former President Luiz Inácio Lula da Silva in 2003, Levy seems to be exactly the type of professional that financial markets were hoping might be appointed. Read more
By Marcos Troyjo of Columbia University
As Dilma Rousseff struggles to assemble a new economic team after the bitter political strife that led to her re-election by a thin margin, a tension has built up between continuity and change.
The divide between the “more of the same”, “nothing is wrong” discourse that Dilma’s marketing gurus had her voice during the campaign and the no-nonsense imperatives of economic reality that compel her to shift course is now a major cause of dispute in her own political support base. Read more
The plot thickens over the choice of Brazil’s next finance minister.
On Thursday, business daily Valor Econômico reported that President Dilma Rousseff had invited Luiz Carlos Trabuco Cappi, head of the non-government bank Bradesco, to replace Guido Mantega next year. According to the newspaper, Rousseff met with Lázaro Brandão, president of Bradesco’s board, on Tuesday this week to discuss the matter. With Brandão on side, it would make it easier for Trabuco to accept the position and then return to the bank in the future, the daily said. Read more
Ministers resign all the time and there’s nothing unusual about one of them handing in his or her notice as the head of government is preparing to unveil a new cabinet for a second term in office. But Marta Suplicy’s resignation as Brazil’s minister of culture on Tuesday had a peculiar sting in the tail.
After the usual stuff about how happy she was to have achieved all she had done in the job, Suplicy delivered what journalists sometimes refer to as a “nut paragraph”: Read more
For a few days, it appeared that former president Luiz Inácio Lula da Silva had disappeared from the campaign for re-election of his comrade and protégé, incumbent president Dilma Rousseff.
But with only five days left before the second-round run-off on October 26, he reappeared in fine form, ripping into rival candidate Aécio Neves of the centrist PSDB in a speech in Pernambuco, the only state in Brazil’s poor and politically important northeast where Dilma lost in the first round of the elections on Oct 6. Read more
Like the country’s soap operas, Brazil’s presidential elections have been full of drama, improbable story lines and last-minute cliff hangers. Monday night was no different.
Just as Brazilians were beginning to wonder whether Aécio Neves of the centrist PSDB party could actually win this Sunday’s vote, a Datafolha poll showed President Dilma Rousseff ahead for the first time since the first round of elections on October 5. The results are still too close to call though, falling with the polling firm’s margin of error. Read more
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. Read more
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. Read more
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.) Read more
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. Read more
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. Read more
For President Dilma Rousseff of Brazil, the latest poll on her popularity offers from her perspective good news and bad news in equal measure.
The good news from the Pew Research Center is that 51 per cent of Brazilians view her favourably for the presidential elections in October compared with 27 per cent for Aécio Neves, the opposition candidate from the more pro-business PSDB party, and 24 per cent for her other opposition rival Eduardo Campos.
The bad news is that underneath these headline figures, there is a wealth of data showing Brazilians are becoming dissatisfied with their lot. Read more
By Stephany Griffith-Jones, Columbia University
Leaders of the BRICS (Brazil, Russia, India, China and South Africa) nations are committed to the creation of a new Development Bank for infrastructure and sustainable development. Details of the bank’s operations are expected at the forthcoming BRICS summit to be held in Brazil this July.
The bank is set to play an important role in helping to meet needs for an estimated US$1tn or more in annual investments in infrastructure and sustainable development. The future growth prospects of the BRICS countries will depend in large measure on these investments materialising.
What are the likely challenges this institution will face as it moves from the design to the operational stage? Read more
It had, it turns out, been too good to be true. After a positive start to the year, Brazil’s industrial production fell by 0.5 per cent in March from February and by 0.9 per cent in comparison with March 2013, national statistics agency IBGE said on Wednesday.
The figures will add to the gloom in Brasília, after the central bank’s weekly survey of market economists on Monday showed the consensus on GDP growth during 2015 falling below 2 per cent for the first time, to 1.91 per cent. The outlook for this year is a marginally more dismal 1.63 per cent.
Brazil’s growth story, it seems, is failing to produce any happy endings. Read more
Virgilio A. F. Almeida, Ministry of Science, Technology and Innovation, Brazil
With three billion users worldwide, the Internet is today considered an essential tool in the life of almost every citizen and a key component of economies and governments around the world. The impact it has made in just two and a half decades on standards of living, work, education, entertainment, political participation and, above all, the way we interact with each other, is so profound, so fast, and so complete, that it has no parallel in the history of global civilization. Read more
You cannot stay one day in Brazil without hearing someone complain about high taxes and poor public services. According to this narrative, the prices of everything from cars to beauty products are inflated by opaque taxes even as the nation struggles with sub-standard hospitals, inadequate public transport and other services.
Now a study from a consulting company, Brazilian Institute of Planning and Taxation (IBPT), seems to bear out the common perception about Brazil’s tax burden. It ranked Brazil last in a list of the 30 countries judged by taxation versus quality of services. Read more
Normally investors buy on rumour and sell on fact. In Brazil this month, the reverse seemed to happen. Investors last week began buying stocks on a rumour that President Dilma Rousseff had fallen in opinion polls.
A polling agency, Ibope, then released a poll on voters’ intentions regarding candidates in the planned presidential election this October, showing her holding steady compared with her opposition opponents, disappointing the market punters. Read more