Brazil politics

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 »

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 »

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 »

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. Continue reading »

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? Continue reading »

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. Continue reading »

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. Continue reading »

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. Continue reading »

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. 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 »

The 13th in our series of guest posts on the outlook for 2014 is by Marcos Troyjo of Columbia University

As a new year begins, uncertainties generally abound. But that is not true about Brazil in 2014. Quite the contrary. The world can clearly see what is coming Brazil’s way: a country treading below potential.

When Luiz Inácio Lula da Silva was campaigning for president in 2002, he wanted to signal his willingness to stick to the tenets of economic stability established by Fernando Henrique Cardoso and yet push for change in other fronts. He did so by writing a ‘Letter to the Brazilian People’. Continue reading »

Justice in action

For the first time in their country’s recent history, Brazilians finally had a taste of seeing politicians going to jail for corruption.

Last Friday – symbolically, the same day that the Proclamation of the Republic is celebrated in Brazil – the court decreed prison for a group of 12 politicians and bankers involved in the scandal of Mensalão or ‘big monthly payment’, the vote-buying scheme in Congress that used public funds to pay bribes. Continue reading »