News from Brazil

Brazil Business & Economy News

In Brazil on September 23, 2011 at 9:53 am

ECONOMY

The government has taken small steps to help local firms. In August it cut payroll taxes for a few labour-intensive industries. But mostly it has tried to keep out foreign goods and capital. Mr Mantega says Brazil is “under siege” from imports. Last month the government tweaked procurement rules to favour local products (Chinese-made army uniforms were an irritant). In the past year Mr Mantega has raised taxes on foreign capital. He wants the World Trade Organisation (WTO) to let countries levy tariffs on imports from places that artificially weaken their currencies (The Economist).

Brazil’s central bank unexpectedly acted to halt the currency’s slide on Thursday, highlighting growing concern among officials that the global financial crisis is damaging Brazil’s economy and could cause a potentially destructive spurt in inflation (Reuters).

Brazil will be one of the main destinations of foreign investment next year, a study released by the country’s Institute of Applied Economic Research (IPEA) said (Xinhua).

Economists raised their forecast for Brazil’s benchmark inflation index in 2012 to 5.5 percent from 5.4 percent previously, according to a weekly central bank survey (Reuters).

Gross Domestic Product (GDP) will grow less than the world average in 2011 and 2012, a report released by the International Monetary Fund (IMF) said. According to the report, Brazil’s GDP will record an increase of 3.8 percent in 2011 and 3.6 percent in 2012, against a 4-percent world average in both years (Xinhua).

Brazil’s federal revenue rose 15.92 percent in August from a year earlier, the federal tax agency said. The government collected 74.61 billion reais ($39 billion) in August compared with 64.36 billion reais in the same month a year earlier, the agency said in a report distributed today in Brasilia (Bloomberg).

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AVIATION

Embraer released its outlook dedicated to the Chinese regional aviation market for 2011-2030 at a press conference in Beijing, China, on the opening day of the 14th Beijing Airshow, September 21-24. In line with the expansion of China’s aviation market and economic development, it is forecasted that 975 new regional jets will be delivered over the next 20 years, including 15 for 30-60 seats, 440 for 61-90 seats, and 520 for 91-120 seats, which accounts for around 13% of global market demands (Embraer).

Embraer delivered the first EMBRAER 190 jet to Alitalia. This aircraft is part of an order announced in March 2011 for five EMBRAER 190 and 15 EMBRAER 175 jets by the Italian airline, and will be operated through a leasing agreement with Air Lease Corporation, based in the U.S. (Embraer).

LAN Airlines said it hopes its multibillion-dollar takeover of Brazil’s TAM will be completed in the first quarter of 2012, but it is studying conditions imposed by Chile’s regulator (Reuters).

To expand business in Latin America without making acquisitions, Lufthansa says it is boosting its capacity on routes to Brazil by 60 percent this year (Reuters).

Demand for domestic plane tickets in Brazil increased 20.14 percent in the first eight months of 2011, according to a study released by the country’s National Civil Aviation Agency (ANAC) (Xinhua).

Metalworkers at Embraer , the world’s third-largest commercial planemaker, started a 24-hour strike on Thursday to demand a more than 17 percent salary increase (Reuters).

Brazil’s government will set out an ambitious timeline and maintain veto rights over public-private projects to expand the country’s airports by the 2014 soccer World Cup, a senior official has told Reuters.

SPLIT SECOND POLLS

BANKING

Brazilian banks have “negligible” exposure to bad sovereign debt and stress tests show they are prepared to withstand any downturn in the global economy, the central bank said (Reuters).

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MINING & STEEL

Following extensive research that began more than 35 years ago, Tecnored Desenvolvimento Tecnológico S.A., a Vale company, in partnership with Brazil’s development bank, BNDES, and Logos Tecnocom, have started up the first pig iron demonstration plant that does not use traditional blast furnace methods, in Pindamonhangaba, São Paulo state. Pig iron is a fundamental element in steel production. The innovation enables higher productivity, lower emissions of CO2 and particulate matter, the flexible use of raw materials, and a reduction of up to 30% in the cost of steel production (Vale).

OIL

Brazilian oil company HRT  closed a deal to buy four Chinese-made drilling rigs for its campaign to explore Amazon oil blocks, a source close to the deal said. The company is expected to close a second deal for another four rigs in the next 10 days with the same shipyard (Reuters).

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