News from Brazil

Brazil Business & Economy News

In Brazil on July 5, 2012 at 5:27 pm

ECONOMY

Economists cut their forecasts for economic growth in Brazil this year for the eighth straight week, to 2.05 percent from 2.18 percent, a central bank survey showed (Reuters).

Brazil’s stalled economy should gain steam in the second half of the year as government stimulus measures and lower interest rates begin to pay off, Finance Minister Guido Mantega said (Reuters).

The Brazilian government extended domestic tax breaks on home appliances and furniture, Brazilian Finance Minister Guido Mantega said, maintaining efforts to help ailing Brazilian industries (Reuters).

Long seen as a classic example of Brazil’s legendary red tape and slow-moving institutions, antitrust regulator Cade is racing to clean up its act to keep pace with a boom in corporate takeovers in the world’s sixth-largest economy. The Council for Economic Defense, as the Cade is formally known, is undergoing a major makeover after a new law increased its powers and created a “pre-merger” approval process instead of the costly and sometimes messy “post-merger” system (Reuters).

Industrial production in Brazil shrank in May for the third straight month, supporting the case for more interest rate cuts and highlighting a persistent challenge for policymakers as they struggle to revive a slowing economy (Reuters).

Ilan Goldfajn is one of the best known economists in Brazil.  He’s the chief economist at Itau Unibanco, a position he’s held for many years.  Goldfajn is also somewhat of a Brasilia insider, having served for two years as the deputy governor of Brazil’s Central Bank. Read the interview at Forbes.

BUSINESS

German chemicals maker BASF and oil major Shell have been told by a Brazilian court to pay 1.06 billion Brazilian real ($525.23 million) into a compensation fund for former employees at a pesticides plant who said their health suffered from working there (Reuters).

Brazil’s competition regulator approved Brazilian industrial group Camargo Correa’s June purchase of a controlling stake in Portuguese cement maker Cimpor, subject to several conditions (Reuters).

Amazon.com Inc is expected to set up a digital bookstore in Brazil in the fourth quarter, as it seeks to get a piece of the fast-growing online retail market in the country that inspired its name (Reuters).

Shares in Eike Batista’s oil and gas company, OGX Petroleo & Gas Participacoes (OGX), rebounded after a rollercoaster week saw them drop by forty percent earlier, temporarily knocking some US$4 billion off the Brazilian billionaire’s personal fortune, according to calculations by Bloomberg (The Rio Times).

AUTOMOTIVE

Automobile production in Brazil slipped in June despite a sharp jump in sales, as carmakers took advantage of tax breaks to draw down inventories but remained cautious about restarting idle production lines (Reuters).

General Motors Co, frustrated with years of slipping market share in Brazil, is overhauling half its lineup in order to grow faster than its rapidly multiplying rivals, a senior country executive told Reuters.

World number two truckmaker Volvo cut 208 jobs at a factory in Brazil in response to falling sales and weaker economic forecasts (Reuters).

AVIATION

Technical failure and human error led to the loss of an Air France flight over the Atlantic in June 2009 and the deaths of 228 people, according to the final report into the crash. The report by France’s aviation authority, the BEA, blames the Airbus A330′s ergonomics as well as inappropriate action by the pilots. The jet disappeared in a storm while en route to Paris from Rio de Janeiro (BBC).

Gol Linhas Aereas , Brazil’s No. 2 airline, aims to staunch losses by the fourth quarter, its new chief executive told a local newspaper, promising to show results after a wave of recent layoffs (Reuters).

BANKING

US rating agency Moody’s had downgraded the ratings of 11 Brazilian banks by one to three notches, almost all of them to the level of Brazil’s sovereign credit rating (MercoPress).

BIOFUELS

The ethanol industry used to fuel a large percent of vehicles on the roads of Brazil is in a state of crisis following moves by the government to reduce gasoline and diesel costs at the pump. The CIDE tax recently cut to help Petrobras stay competitive has in effect undercut Brazil’s pioneering ethanol industry, creating a bleak outlook for the alternative fuel sector (The Rio Times).

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MINING & STEEL

Brazil’s Vale SA, the world’s largest iron ore producer, has shipped about 300,000 tonnes of iron ore pellets to major Indian steel makers so far in 2012 (Reuters).

China’s Wuhan Iron & Steel Group, the country’s fourth-largest steel producer, denied a media report that said the company had abandoned plans to build a $5 billion steel plant in Brazil due to logistics and coking coal supply issues (Reuters).

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