Brazil likely to breach spending cap by 2% of GDP this year, says Citi

Brazil is on track to pierce its spending ceiling by 2% GDP this year, Citi economists have warned, predicting that the government will significantly ease its fiscal policy to tackle the Covid-19 pandemic. The cap limits the growth of public spending to the previous year’s inflation rate and is widely seen as the government’s most important fiscal rule.

Source: Money Times

Petrobras gains $3.6 bn in market value in one day

After a speech at the swearing-in ceremony of Petrobras’ new CEO, Joaquim Silva e Luna, the company’s shares soared this afternoon. Petrobras gained more than R$20 billion ($3.6 bn) in market value during the trading session. At 4:05 pm, the company’s value reached just over R$318 billion ($57 bn), compared to R$297 billion ($53 bn) at Friday’s close.

Source: Valor Investe

Brazil accumulates $6.31 bn trade surplus

Brazil’s trade balance posted a $3 billion surplus in the third week of April, bringing the accumulated positive balance for the month to $6.310 billion, the Economy Ministry said. In the month, exports totalled $15.381 billion, with $6.844 billion in the third week. Imports, meanwhile, reached $9.071 billion for the month, after totalling $3.840 billion in the last week.

Source: Money Times

Demand for credit rises 2% in March

After falling in February, the search for financing in the country in March indicates recovery. The INDC (Neurotech Index of Demand for Credit) grew 2% in the third month of this year compared to a drop of 9% previously. Furthermore, in the year-on-year comparison, it registered a high of 38%, surpassing the mark seen in the same period completed in February, when it advanced 21%.

Source: UOL Economia

Fiscal deterioration may pull GDP down in 2022, XP says

Despite the impasse over the 2021 budget and the disturbances in the public accounts, the current approach of the economic policy should be maintained. The brokerage house sees the country going into recession in 2022, in case the most pessimistic hypothesis comes true. While the GDP should grow 3.2% this year and 1.8% next year in the baseline scenario, in the pessimistic alternative, growth would be 2.8% in 2021, followed by a 1.1% drop in the GDP in 2022.

Source: Valor International

States allocate $300mm to help small companies

States have been resorting to their own funds to fill the gap created by the lack of a formal proposal from the federal government to reissue aid programs for micro and small businesses. In the absence of programs such as BEm and Pronampe to alleviate the effects of the pandemic, state governments are offering extraordinary lines of credit or emergency aid. At least 15 have already offered or announced some kind of relief measure, totalling R$1.7 billion ($300 mm).

Source: Valor International