News from Brazil

Brazil Business & Economy News

In Brazil on July 27, 2012 at 10:15 am

ECONOMY

Ruchir Sharma argues in Foreign Affairs (“Bearish on Brazil,” May/June 2012) that Brazil’s incredible rise over the past ten years has depended on the sale of commodities, and that as commodity markets begin to slow, so, too, will Brazil’s growth. Sharma correctly notes that in the coming years, Brazil will likely need to confront a decline in commodity purchases from China. But he fails to recognize that economic stability has also driven Brazil’s growth. Read the reply by Shannon O’Neil at Foreign Affairs.

A rebound in Brazil’s foreign direct investment in June fully covered a widening current account deficit, central bank data showed, underscoring the resilience of foreign investment even as the international and local economy slow sharply (Reuters).

The Brazilian economy is on its way to recovery, with recent interest rate cuts and stimulus measures expected to lead to greater growth in the second half of 2012, central bank president Alexandre Tombini said (Reuters).

Fitch affirms Brazil’s ratings at ‘BBB’, outlook is stable (Reuters).

The release of Brazil’s unemployment rate for June was postponed due to a civil servants’ strike, the national statistics agency IBGE said (Reuters).

Lending in Brazil grew at the slowest pace in four months in June as private sector lenders put the brakes on credit disbursements to arrest a surge in delinquencies (Reuters).

Consumer confidence in Brazil fell for the third consecutive month in July, as Brazilians grew increasingly dissatisfied with current economic conditions and less optimistic about the near future. Brazil’s consumer confidence index fell to 121.6 in July from 123.5 in the prior month after seasonal adjustments, private research institute Fundação Getúlio Vargas said (Reuters).

DIRECT DATA

Check out the latest economic indicators in English directly at Brazil’s BCB or central bank, the Sao Paulo stock Eechange BM&F Bovespa and Brazil’s statistics institute, IBGE.

SPLIT SECOND POLL

BUSINESS

The BNDES has approved financial support for Recepta Biopharma S.A. in the amount of R$ 28.9 million. The company employs biotechnology to produce pharmaceutical products used in treating cancer, a high-tech sector with the potential to generate benefits for society as a whole. BNDESPAR, the BNDES’ corporate shareholding arm, will subscribe the company’s shares, holding a part of its capital (BNDES).

AUTOMOTIVE

The Brazilian subsidiary of General Motors Co. says it has temporarily shut down its eight production units near Sao Paulo amid fears of unspecified action by a local union that warns of imminent mass dismissals (Washington Post).

AVIATION

Boeing Co. ’s Brazilian unit, Boeing do Brasil, expects to sell more than 1,000 aircraft in the South American country by 2032, equivalent to 40 percent of potential sales to all of Latin America, O Estado de S. Paulo reported, citing an interview with the unit’s chief executive officer, Donna Hrinak (Bloomberg).

BANKING & FINANCE

Redpoint e.ventures, the Brazilian venture-capital firm created by Redpoint Ventures and e.ventures, said it had raised $130 million for its inaugural early-stage fund (Reuters).

Brazil’s bank giants are putting prudence before politics. Itau and Bradesco are slowing consumer lending as loan defaults climb. The move runs counter to the wishes of President Dilma Rousseff, who is pressuring the nation’s banks to lend more at rock-bottom rates. But with consumers and the broader economy under pressure, a dose of financial conservatism is welcome (Reuters).

Brazilian companies are canceling initial public offerings at the second-highest rate among the biggest emerging markets as slowing economic growth makes the country’s benchmark stock index the worst performer this year (Bloomberg).

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OIL & GAS

The chief executive of Petrobras , Maria das Gracas Silva Foster, will take over direct management of the firm’s international operations, following the resignation of the current head of the unit, Jorge Luiz Zelada (Marketwatch).

PORTS

The newest addition to Rio de Janeiro state’s Superporto do Açu will be where Norwegian company Subsea 7 plans to begin manufacturing oil and gas pipelines in 2014. The R$21 million-per-year lease was signed following Subsea 7’s withdrawal from plans to build the project in the southeastern state of Paraná, where difficulties in obtaining an environmental license blocked the company’s first choice of location (The Rio Times).

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