News from Brazil

Brazil Business & Economy News

In Brazil on November 11, 2011 at 10:04 am

ECONOMY

Brazil will keep its spending in control while offering stimulus to local businesses to dodge a global slowdown triggered by Europe’s debt meltdown, Finance Minister Guido Mantega said (Reuters).

According to the agency, the use of Real international derivatives transactions increased by 50% between 2004 and 2010, while the use of the Indian Rupee and the Russian Ruble has more than doubled. The use of the Yuan has increased about 12 times during the period (India-Brazil Chamber).

As Brazil’s economy keeps growing, a record number of Brazilians are heading to the country’s tropical beaches on package holidays. But not everyone welcomes the invasion of tourists or what that change symbolises: the rising affluence and aspirations of Brazil’s expanding middle class (BBC).

Brazil’s central bank is cutting interest rates citing a novel forecasting tool called SAMBA that some economists say isn’t in step with the country’s inflation realities (Businessweek).

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BUSINESS

Brazil’s Braskem , the largest petrochemical company in the Americas, booked a steep third-quarter loss as Brazil’s tumbling currency drove up the cost of its foreign debts (Reuters).

The Cariocas, as the residents of Rio de Janiero call themselves, like to joke that the people of São Paulo, the Paulistanos, love to shop because they don’t have any beaches. That might be true. But little of that luxury shopping — in São Paulo or in the rest of Brazil — is happening online (New York Times).

In the last couple of years, some Brazilian brands have begun to invest in collections whose manufacturing is less harmful to the environment. And what brings together buyers and sellers of eco-friendly products is the fact that, increasingly, “conscious” fashion has gone beyond an artisanal, rustic appearance to become attractive pieces that truly inspire desire, without destroying the environment (New York Times).

According to Bain & Co., a global business consulting firm with headquarters in Boston, the market for luxury goods like apparel, accessories, jewelry and beauty products in Brazil is now worth approximately $2.5 billion, with an expected growth rate of 10 to 15 percent a year over the next five years (New York Times).

As internet penetration levels increase in Brazil, significant changes in advertisement have been observed. Traditional media has been losing spot to a more interactive environment, changing the advertisement industry in Brazil (The Brazil Business).

AVIATION

Airline TAM posted a third-quarter net loss of 620 million reais ($348 million), compared with a 734 million reais profit a year earlier (Reuters).

TAM, Brazil’s biggest airline by market value, expects growth in the country’s airline traffic to slow to 8 percent to 12 percent next year as economic expansion moderates, Chief Financial Officer Libano Barroso said (Bloomberg).

Embraer will upgrade its E-170 and E-190 jets with new engines and wings by 2018 rather than build a larger, all-new model to take on Boeing Co., Airbus and Bombardier. Developing “second-generation E-Jets” will cost about $2 billion, cheaper than the $3 billion-plus for a new plane, and may include stretching them to seat as many as 132 people, 10 more than the biggest current aircraft (Bloomberg).

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OIL & GAS

Chinese state-owned oil company Sinopec Group said it had agreed to pay $3.54 billion to Portuguese oil firm Galp Energia for a 30 percent stake in its deep-sea oil asset in Brazil (Reuters).

EDUCATION

In Brazil, enrollment in higher education rose 110 percent over the past decade. According to the Census of Higher Education, released Nov. 7, enrollment reached 6.3 million people in 29,500 courses offered by some 2,377 institutions. “Maybe it was the best decade for access to higher education, both in relative and in absolute terms  — but especially in absolute,” said Fernando Hassad, the Brazilian Education Minister, after the results were announced. The minister may have been too enthusiastic (Bloomberg).

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