News from Brazil

Brazil Business & Economy News

In Brazil on November 25, 2011 at 10:46 am

ECONOMY

“Now it’s our turn.” This phrase spilled from the mouths of young Brazilians again and again this week. Their country pulses today. Pick your indicator: Soaring economic growth. Booming sales of yachts and luxury apartments and Louis Vuitton handbags to the rich. The fact of more cellphone subscriptions in Brazil than there are Brazilians. The billions garnered from exporting commodities to China. Deep reserves of oil (New York Times).

The Brazilian government slashed its 2011 economic growth estimate to 3.8 percent from 4.5 percent, blaming the worsening debt crisis in Europe and a sluggish U.S. economy. Even as activity slows, the country’s inflation is seen accelerating to 6.4 percent in 2011 from a previous forecast of 5.8 percent, according to a joint Treasury and Federal Budget office report (Reuters).

Brazil’s economy expanded at the slowest pace in 10 quarters in the three months through September after policy makers curbed bank lending and raised interest rates to rein in inflation (Bloomberg).

The largest Brazilian companies are finding it tougher to obtain bank financing, a central bank official said on Tuesday, signaling a restrictive credit market that will likely weigh on economic growth (Reuters).

Too much liquidity in global markets and high commodities prices are making it difficult for Brazil to cut its inflation target in the short term, the president of the country’s central bank, Alexandre Tombini, told news magazine Veja (Reuters).

Brazil’s economy created 126,143 government-registered jobs in October, the Labor Ministry said. Analysts had expected Latin America’s biggest economy to add 167,178 formal jobs, according to the median estimate in a Bloomberg survey of 12 economists (Bloomberg).

According to Central Bank statistics, the Brazilian economy is entering a phase of decline. Economists fear that the problems in the eurozone and in the U.S. are beginning to take their toll on Brazil, weakening the demand for Brazilian exports and reducing the inflow of money into the economy (The Rio Times).

Brazil’s government is working on a new rule to further limit the purchase of farm land by foreigners, arguing that the current legislation has been “insufficient,” a Brazilian newspaper said (MercoPress).

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BUSINESS

Brazilian retail chain TendTudo, which sells home improvement products and construction materials, has taken the first steps into what it believes could be a $400 million a year market in communist Cuba (Reuters).

AGRI ETC

Output from the world’s biggest sugar producer Brazil is likely to disappoint again next season, putting a potential floor under global sugar prices that have been falling over the past three months (Reuters).

Sugar output in Brazil’s Center South, the world’s largest producing region, will jump to a record next year as crops expand and recover from a drought, the head of the country’s largest sugar trading group said (Bloomberg).

AUTOMOTIVE

Fiat, Volkswagen, General Motors Co. and Ford Motor Co. cars that are among best-sellers in Brazil wouldn’t meet U.S. or European safety standards, according to a group that conducted crash tests on the vehicles (Bloomberg).

Land Rover, owned by Indian group Tata, is studying building a plant in Brazil, which would be the first manufacturer’s plant outside the UK. According to  O Estado de São Paulo, the Minister of Development, Industry and Foreign Trade, Fernando Pimentel, who was in London to attend the annual meeting of the Economic and Trade Joint Committee, was quoted as saying that the investment is almost set. Pimentel had said that the local unit has not yet been chosen and it is negotiating with states (India-Brazil Chamber).

AVIATION

TAM was too slow in responding to its rival Gol’s surging share of domestic air traffic, one of the company’s controlling shareholders said in an interview with newspaper Valor Economico. “We should have been faster to combat Gol in the domestic market,” said Mauricio Amaro, a member of the airline’s controlling family and vice chairman of its board (Reuters).

The Latin American airline colossus to be formed via Chilean carrier LAN’s takeover of Brazil’s TAM could boost its fleet to as many as 500 aircraft within a decade, Amaro said (Reuters).

Panama and Brazil have agreed to increase air services, with 21 flights running between Panama City and the Brazilian cities of Recife, Salvador de Bahia and Curitiba, the Civil Aeronautics of Panama (AAC) said (Xinhua).

Embraer and BOC Aviation, a Singapore-based aircraft leasing company, have signed a contract for the sale of fifteen EMBRAER 190 aircraft (E190).  Deliveries are scheduled from the fourth quarter of 2012 through 2014 (Embraer).

BANKING & FINANCE

BR Partners, the Brazilian financial-advisory firm founded by former Goldman Sachs Group Inc. executives, agreed to buy Banco Porto Seguro SA for an undisclosed amount (Bloomberg).

The BNDES registered a net profit of R$ 7.9 billion from January to September 2011. The result represents an increase of R$ 1.8 billion (29.5%) compared to the R$ 6.1 billion obtained in the same period in 2010. The main factors that contributed to the BNDES’ performance in 2011 were the revenue from the reversal of provisions for credit risk, R$ 1.6 billion, and the growth of R$ 1.3 billion in the result from corporate shares (stakes), 32.1% higher than in September 2010 (BNDES).

ENERGY

Brazil will introduce an optional program under which customers will pay more for electricity when demand is high and less when it’s low as part of an effort to become more energy efficient (Bloomberg).

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MINING & STEEL

Vale, the world’s largest iron ore miner, said it had suspended its business with an Amazon-based pig-iron producer accused by the government of illegal deforestation (Reuters).

Vale informs that its Board of Directors approved a proposal made by our Chief Executive Officer Murilo Ferreira for the adoption of a new structure at the Executive Board.  As a consequence, Vale´s Executive Board will have the following structure.

The board of Brazil’s Vale has approved a $6 billion expansion of its Moatize coal project in Mozambique to lift output to 22 million tons per year from the 11 million tons it expects to mine initially (Reuters).

Private firms that invest in gold mining in Brazil will be pouring an estimated 2.4 billion dollars over the next four years, O Globo newspaper reported Sunday, citing official figures (MercoPress).

OIL & GAS

Brazil’s government suspended Chevron Corp’s drilling rights until Chevron clarifies the causes of an offshore oil spill, the latest twist in a political firestorm threatening the U.S. company’s role in Brazil’s oil bonanza (Reuters).

 

 

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