October 21, 2019
Latest News

Brazil teeters on brink of recession

Carlos Meneses Sanchez

Sao Paulo, Aug 13 (efe-epa).- Preliminary data on the performance of the Brazilian economy in the second quarter points to a threat that the Latin American powerhouse will re-enter recession in the first year of the presidency of business-friendly rightist Jair Bolsonaro.

The index of economic activity, seen as a leading indicator of gross domestic product, retreated 0.13 percent in the April-June period compared with the previous three months, Brazil's Central Bank said.

If the official GDP figure set to be released Aug. 29 also shows a decline, the Brazilian economy will meet the technical definition of a recession: two consecutive quarters in negative territory.

Brazil's GDP shrank 0.2 percent in the January-March quarter.

The discouraging growth numbers coincide with an unemployment rate of 12 percent as the sectors that have traditionally powered the Brazilian economy continue to suffer the after-effects of the sharp downtown in 2015-2016.

Industrial output fell 1.6 percent in the first six months of 2019, driven mainly by a 13.7 plunge in the extractive sector, which includes mining.

Even so, analysts at the leading banks with operations in Brazil, such as Itau-Unibanco, Bradesco and Santander, say they expect an improvement in the second half of the year.

"The truth is that growth will be around zero or slightly positive. I don't think it will be negative," Marcelo Kfoury, an economist with the prestigious Getulio Vargas Foundation, told Efe.

Kfoury distinguished between "structural problems," related to productivity and investment, from transient factors such as declines in the mining sector and in exports of vehicles to neighboring Argentina, which is suffering from economic woes of its own.

So far, the response of the right-wing government to the poor economic data has been to urge patience.

"Give it a year or two, give an opportunity to a government that will last four years and is liberal democratic. Don't work against Brazil and have a little patience," Economy Minister Paulo Guedes says.

The opposition, led by the center-left Workers Party (PT), blames the slowdown on the doctrinaire free-market policies advanced by Guedes.

"What we are seeing is high unemployment, a fall in income, weak economic activity and the withdrawal of (labor) rights. Nothing is good, while Bolsonaro rides on a jet-ski to hide the chaos," PT chair Gleisi Hoffmann said on Twitter, alluding to the president's outing earlier this week on a lake in Brasilia.

The administration has taken steps to ward off recession by pumping 42 billion reais ($10.5 billion) into the economy with an eye toward boosting consumption.

Brazil's Central Bank is also trying to stimulate spending, cutting its benchmark interest rate to a historic low of 6 percent, though the rates paid by consumers on loans and credit cards remain steep.

After taking office in January with a forecast of 2.5 percent GDP growth in 2019, the government has since lowered its prediction to 0.81 percent, in line with the expectations of private sector analysts.

The Brazilian economy contracted by 7 percent in 2015-2016, the country's worst downturn in 70 years, followed by an anemic recovery with growth of 1 percent in both 2017 and 2018. EFE


News history
Tesla stock has risen this month as its 3rd-quarter numbers approach

By David Marino-Nachison

Australian Navy begins sea trials of 3rd air warfare destroyer

Sydney, Australia, Sep 16 (efe-epa).- Australia has begun the first phase of sea trials of its third and final Air Warfare Destroyer, the Department of...

Nissan Motor CEO steps down in the wake of bonus scandal

Tokyo, Sep 16 (efe-epa).- Hiroto Saikawa stepped down from his post as chief executive officer of Nissan Motor on Monday and has been replaced by Yasuhiro...

Trump says US is "locked and loaded" to respond to attack on Saudi oil

Washington DC, Sep 15 (efe-epa).- The president of the United States on Sunday warned that his administration was "locked and loaded" to respond to a recent...

Nissan CEO steps down over bonus scandal

Tokyo, Sep 9 (efe-epa).- Nissan Motor's CEO, Hiroto Saikawa, will step down on 16 September on the back of an investigation into over payments the executive...

Volkswagen to pay multi-million-dollar settlement over 'dieselgate' Australia

Sydney, Australia, Sep 16 (efe-epa).- German car giant Volkswagen has agreed to pay millions in compensation to those affected by its diesel emissions...

General Motors braces for first nationwide strike in 12 years

Washington DC, Sep 15 (efe-epa).- The United Automobile Workers trade union on Sunday called for a nationwide strike of 48,000 employees at General Motors,...

Mexico seeks to topple Brazil's Volkswagen Guinness World Record

Puebla, Mexico, Sep 15 (efe-epa).- The Mexican state of Puebla over the weekend attempted to take the Guinness World Record for the most Volkswagen vehicles...

Argentina's gov't to present new budget amid economic woes

Buenos Aires, Sep 15 (EFE).- Finance Minister Hernan Lacunza will present the proposed 2020 budget to the Argentine Congress this week, a budget that will...

World's biggest oil producer reduces output by 50 percent after Saudi attacks

By Suleiman al-Assad

Battle to power electric vehicles reaches Sweden

By William Boston

Are central banks losing their clout?

By Randall W Forsyth

Ecotourism, the answer to Latin America's rural development needs

By Maria Jose Brenes

Havana-based cigar maker says it doesn't foresee Helms-Burton lawsuits

Havana, Sep 13 (efe-epa).- Habanos S.A., a Spanish-Cuban joint venture that is a leading maker of Premium cigars, said Friday it does not believe it is at...

US pledges to increase trade with Brazil, without mentioning bilateral deal

Washington, Sep 13 (efe-epa).- US Secretary of State Mike Pompeo promised his Brazilian counterpart here Friday that exchanges of goods and services between...

Mexicans make drinking straws from reeds to curb use of plastic

Jose de Jesus Cortes

London, Sep 13 (EFE).- The London Design Festival returns this weekend to the British capital with events and facilities bringing together the best of the...

China exempts US soy, pork products from tariffs ahead of US negotiations

By Paula Escalada Medrano.

Vaping giant Juul Labs debates pushing back on US' new ban on e-cigarettes

By Jennifer Maloney

Trump's plans for oil drilling in Arctic refuge clear big hurdle

By Timothy Puko


Washington, Sep 12 (efe-epa).- The International Monetary Fund said Thursday that the trade war between the United States and China is already triggering a...

Argentina’s obsession with the dollar, a vicious circle amid a crisis

By Rodrigo García

New tariffs applied on Chinese imports to the US

Beijing, Sep 12 (efe-epa).- China's Customs Tariff Commission of the State Council has postponed the planned 25 percent tariffs on 16 products from the...

EU's top diplomat visits Mexico to boost trade agreement

By Eduard Ribas i Admetlla

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.