Information regarding Brazil’s finance sector and the country’s macroeconomy.
As a result of the economic effects of the new coronavirus pandemic, Brazilian exports to the United States are expected to fall between 20% and 25% by 2020, predicts Amcham, the U.S. chamber of commerce in Brazil. Imports from the U.S., on the other hand, are expected to […]
Itaú Unibanco has made all available resources for the Pronampe credit line, created to help micro and small businesses affected by the new coronavirus. In all, 37,000 micro and small business customers of the private bank received a total of R$ 3.7 billion ($ 711 mm). According to the bank, in just half an hour of provision the institution finished 100 % of the volume available for the credit line.
The Economic Activity Indicator of the Getúlio Vargas Foundation (IAE-FGV) pointed to a growth of 0.5% in the economy in May compared to April. The index released shows a small recovery after strong retractions in the previous two months. FGV warns, however, that activity is still at a much lower level than in the pre-pandemic period.
The Brazilian Government has stopped using million-dollar resources already donated by other countries to combat crimes in the forest. More than R$33 million ($6.3 mm) already donated to Brazil through the Amazon Fund, a programme financed with money from Norway and Germany, are available for two actions: one to fight fires by Ibama and the other for the Ministry of Justice to expand the work of inspection in the forest by the National Force. These resources, however, are stored in the BNDES.
State-owned companies recorded net profits of R$109.1 billion ($20.5 bn) in 2019, an increase of 53%, compared to 2018 when it was R$71.3 billion ($13 bn). According to the Ministry of Economy, there were 200 state-owned companies at the end of 2019, 46 of which were direct and 154 were indirect. Among those with direct control, 18 were dependent. At the end of 2018, the country had 209 state-owned companies.
Caixa Econômica Federal has exceeded the R$5 billion ($943 mm) in credit to micro and small businesses during the pandemic. The Support Program for Micro and Small Businesses (Pronampe) reached the limit of R$4.24 billion ($800 mm) in loans and the lines of the Guarantee Fund for Micro and Small Businesses (Fampe) lent R$1.8 billion ($339 mm).
The Ministry of Economy stated that Pronampe, the federal government’s programme to guarantee credit for micro and small businesses, has already released more than R$3 billion ($566 mm) in the last three days. The initiative, which is aimed at small and medium-sized companies , provides for the government’s guarantee of part of the loans made by banks to these businesses, in a lower proportion than in Pronampe.
BNDES approved an investment of R$ 300 million ($ 56 mm) in the Alaof V Brasil equity fund, focused on medium-sized companies. BNDES informed that it will contribute a maximum of 25% of the total that the fund can raise. The amount raised by the fund may reach a maximum of R$ 1.2 billion ($ 227 mm).
The National Bank for Economic and Social Development (BNDES) reached a total of R$5 billion ($944 mm) for micro, small and medium businesses in the working capital loan line. According to BNDES, 16,318 operations have already been approved with 15,094 companies, employing 372,800 people, with an average value of R$318,000 ($60k) per operation.
Since the outbreak of the coronavirus, Brazil has risen from 210 to 388 points between February and June on JPMorgan’s EMBI+ (Emerging Markets Bond Index). This indicator works as a thermometer of the level of confidence that foreign investors have in emerging countries. Consultancy Macrosector project that EMBI+ Brazil could close the year with an average of 350 points. If this estimation is correct, it would be the worst result since the impeachment of president Dilma Rousseff in 2016, when the index hit 384 points.
