The National Bank for Economic and Social Development (BNDES) has provided R$105 billion ($17.5 bn) in emergency support since the beginning of the new coronavirus pandemic in March of this year. The funds have gone to 258,000 Brazilian companies that are responsible for generating 8.5 million jobs.
The need for cash resources to cover extra spending on the covid-19 pandemic continued to put pressure on public debt in September, with the National Treasury issuing bonds above the historical average. The Federal Public Debt (DPF) rose by 2.59% in nominal terms, from R$ 4.412 trillion ($735 bn) to R$ 4.527 trillion ($755 bn).
Source: Agencia Brasil
The stock of bank credit for micro, small and medium-sized enterprises (MSMEs) reached an annual growth rate of 28% in September, driven by the set of initiatives the government took to provide lines of funding to this segment during the pandemic.
Source: Valor Investe
Brazil will end 2020 with the worst fiscal situation among the largest emerging countries. With challenging conditions for both expenditure and growth, its debt has almost doubled the average for these markets. Brazil’s poor fiscal situation is only overcome by smaller countries like Angola, Libya and Oman, according to an IMF survey.
Source: UOL Economia
The most recent data from the survey conducted by FGV Ibre shows that 52% of Brazilian companies state that a lack of confidence in the government’s economic policy is one of the main factors that are negatively influencing expectations of a changing business environment in the coming months.
Between 2011 and 2020, investments are expected to have fallen by an average of 2.2% per year, according to a survey conducted by Ibre/FGV. This will be the first drop in investment for a ten-year period since 1980, known as the lost decade. Investment is yet another indication of the country’s economic weakness in the current decade.
Data published by IBGE show how difficult it is to maintain an active business in Brazil. One in four companies have managed to stay in business for over 10 years. According to the survey, of the approximately 889,500 companies created in 2008, only 225,000 were still operating in 2018. In other words, only 25.3% of the companies managed to stay in business for more than a decade.
Caixa Econômica Federal reached the mark of R$ 25 billion ($446 mm) in resources made available in credit lines for small and micro companies during the pandemic period. The bank’s strategy is to provide conditions for entrepreneurs to find solutions to survive in a market that has been negatively affected since the beginning of the year.
Source: UOL Economia
Industrial confidence in Brazil rose in October to its highest level in more than nine years, a survey showed as the sector continues to rebound strongly from the coronavirus closures and leads the economic recovery. The increase was mainly due to the positive business outlook in the current situation, with the sub-index climbing 5.9 points to 113.2, while the expectations index gained 2.2 points to 108.1, according to FGV.
Source: ES Investing
The Economic Affairs Commission (CAE) approved a credit operation of the Inter-American Development Bank (IDB) with BNDES. $750 mm will be made available to finance micro, small and medium enterprises (MSMEs), providing a new cycle of sustainable growth, given the relevant role of the segment in generating jobs and income.
Source: Money Times