News from Brazil

Brazil Business & Economy

In Brazil on May 27, 2011 at 12:18 pm

ECONOMY

New research released this month adds weight to the reports that Brazil’s economic growth is largely being fueled by credit markets. The research by APAS (Paulista Association of Supermarkets) shows that 53 percent of all Brazilian families are spending more than they earn. Similar research by the Household Budget Survey (conducted by the Brazilian Institute of Geography and Statistics) revealed that 75 percent of Brazilian households find it difficult to pay their bills and don’t have enough money to reach the end of the month (The Rio Times).

Is Brazil importing the wrong sort of money? Read the column by Stephanie Flanders, Economics Editor at the BBC.

Brazil’s foreign debt rating outlook was boosted to positive by Standard & Poor’s, which cited strengthening prospects for long-term economic growth (Bloomberg Businessweek).

Once a country associated with the slums known as favelas, Brazil is on its way to becoming a new engine of growth for the luxury industry, executives at the Reuters Luxury and Fashion Summit said this week.

Brazil’s unemployment rate edged down to 6.4 percent in April from 6.5 percent in March, the latest sign of a tight labor market that is pressuring inflation in Latin America’s largest economy (Reuters).

AGRI ETC

While many welcome the investments, the aggressive push comes as Brazilian officials have begun questioning the “strategic partnership” with China encouraged by former President Luiz Inácio Lula da Silva. The Chinese have become so important to Brazil’s economy that it cannot do without them — and that is precisely what is making Brazil increasingly uneasy (New York Times).

The Brazilian government plans to offer a line of subsidized credit to sugar and ethanol mills for the replanting of cane crops, as part of a larger push to stimulate production of the biofuel, agriculture minister Wagner Rossi told a local newspaper (Reuters).

President Dilma Rousseff ordered a team of ministers to look into ways of reducing volatility in ethanol prices, including the possibility of government intervention in the market, the Financial Times reported, citing Energy Minister Edison Lobao (Bloomberg).

AVIATION

Embraer, the world’s biggest regional aircraft maker, will take more than one year to decide whether to build a new family of jets, Chief Executive Officer Frederico Curado told newspaper Valor Economico (Reuters).

US Airways acquires 42 slot pairs at Washington’s Reagan National from Delta as well as rights to operate additional daily service to Sao Paulo in 2015 (Reuters).

Air France Flight 447’s flight recordings show the aircraft slowed to a stall after its airspeed sensors failed while the two co-pilots were at the controls, two people with knowledge of the investigation said (Reuters).

BANKING

Bank of America Corp. is expanding in Brazil with a new commercial banking license that will allow it to take deposits and offer cash-management services to corporate clients in the country (MercoPress).

Brazil will see more acquisitions in its banking system after demand for purchasing credit portfolios from mid-size banks dried up, said central bank director Anthero Meirelles (Bloomberg).

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CONSTRUCTION

Odebrecht International earned the European High Speed Rail Deal of the Year 2010 Award for the contract to construct the Lisbon-Madrid High Speed Train. Located between Poceirão, along the South margin of the Tejo River in the metropolitan region of Lisbon, and Caia, at the border with Spain, the contract corresponds to the concession of the high speed train’s first stretch, which extends 167 km (Odebrecht).

Three members of the consortium that will build Brazil’s Belo Monte dam in the Amazon are pulling out, unhappy with the growing state control of the project, the newspaper O Estado de S. Paulo reported (Reuters).

MINING & STEEL

The world’s largest ore carrier, Vale Brasil, was loaded for the first time on May 24 at Pier I at Ponta da Madeira Port Terminal (TPPM) in São Luís, Maranhão. The ship, which was loaded with 391,000 tons of iron ore, will now sail for Asia (Vale).

Brazilian steelmaker CSN said it would buy the cement and steel assets of Spain’s Grupo Alfonso Gallardo in a deal valued at 946 million euros ($1.35 billion), as it moves forward with a plan to grow overseas (Reuters).

OIL

Brazil’s offshore Libra oilfield likely holds about 5 billion barrels, the director of the National Petroleum Agency said, much less than the 8 billion it had previously estimated (Reuters).

Concerns of mounting political interference at Brazil’s state-run oil company Petrobras are spurring interest in a crop of start-ups seeking to tap the South American nation’s sizable reserves (Reuters).

Petrobras must triple the number of ships and deepwater drilling rigs it uses in order to double its oil and gas production by 2020, its top executive said (Reuters).

POWER

Brazil which gets about 80% of its energy from hydroelectricity is considering a record investment of 4.1 billion Real (2.5 billion USD) for wind farms this year to diversify its power supply (MercoPress).

Fundo de Desenvolvimento do Nordeste, a government fund that investments in development projects in northeast Brazil, will shift its focus from railways to wind farms to meet the region’s growing power needs (Bloomberg).

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