At the end of November 28, the federal government published Decree number 10.139/2019, requiring a review of all regulatory acts in the country within a period of 18 months. What at first appears to be merely another administrative act without any great importance, could, in fact, have serious effects on the entire federal apparatus.
President Jair Bolsonaro said trade with Argentina “will remain the same” despite his animosity with President-elect Alberto Fernandez but didn’t confirm whether Brazil will send a high-ranking representative to his inauguration in Buenos Aires.
The Government of the State of Rio de Janeiro approved R$302.4 (US$76) million in tax incentives for the Rio Motorsports company winner of a bid to build a racetrack in the Deodoro region (west side of the capital) to host F-1.
Brazil is transitioning to a world of normal interest rates, while consumer price inflation is below 4% and the central bank’s policy rate has been 5 per cent since October. As such corporate bond market has opened up and several large firms are retiring their overseas debt to borrow from the local market. Traditionally, bank lending to companies stood at an around 47 per cent a year, according to Anefac, an industry association.
It didn’t take much for the founders of Cora, Brazil’s newest startup to tackle some aspect of the broken financial services industry in the country, to raise their first $10 million.
As global concern about the fires devastating parts of the Amazon rainforest peaked in August, one of Scandinavia’s biggest investors dropped a bombshell. Nordea Asset Management which controls more than €200bn of funds, announced it was quarantining Brazilian government debt because of political and environmental risks.
Brazil’s economy ministry has revised its export figures for the second time in less than a week, casting doubt on key data releases and leaving analysts wondering whether they should still trust the reliability of Brazilian statistics. Doubts surfaced last week when the country’s currency was hit by central bank figures showing a sharp deterioration in Brazil’s current account balance in the period January to October, driven by a slide in exports.
Brazil’s economy expanded 0.6 per cent in the third quarter, beating analysts’ expectations and bolstering hopes of a cyclical recovery in Latin America’s largest country.
The government’s plans to kick-start the economy risk being overshadowed by riots in Chile and political turmoil at home. As the window for passing major legislation ahead of 2020 municipal elections starts to close, Brazil-watchers are asking whether the Bolsonaro government can deliver on the rest of its reform programme or whether the country will again succumb to its perpetual habit of disappointing investors.
Brazil’s negotiators already face a tough job at United Nations climate talks, given anger at President Jair Bolsonaro’s stance on the Amazon, but it has become doubly difficult as they are in the dark on their own government’s aims.