Category: Macroeconomy/Finance

Information regarding Brazil’s finance sector and the country’s macroeconomy.

Ibovespa falls more than 3%, but jumps 10.3% in the best April in 11 years

The Ibovespa closed this Thursday (30) with a fall of more than 3%, but it did not prevent the index from closing April with gains of 10.25%, with investors positively reflecting expectations of the reopening of large economies after tough measures of social isolation due to the coronavirus pandemic and with hopes of advancing the treatment of Covid-19. Despite the strong appreciation in April, the index still accumulates losses of 30% in 2020.

Public sector accounts have a deficit of $ 4.3 bn in March

The consolidated public sector accounts, which include the federal government, states, municipalities and state-owned companies, registered a primary deficit of $ 4.3 billion in March, according to information released by the Central Bank. The deficit occurs when public sector spending exceeds revenue from taxes and contributions.

Federal government has primary deficit of $ 3.8 bn in March

Government’s cash flow registered a primary deficit of R$ 21.17 billion ($ 3.8 billion) in March, the best performance for the month since 2017, considering values corrected by the Broad National Consumer Price Index (IPCA), according to the National Treasury. The result, which brings together the National Treasury, Social Security and Central Bank accounts, succeeds the February deficit of R$ 18.274 billion ($3.3 billion).

Debt of companies most affected by the pandemic totals $ 164 bn

The total debt of companies most affected by the Covid-19 pandemic in Brazil amounts to R$ 900 billion ($ 164 billion). Of this total, R$ 556 billion ($ 101 billion) is due to the national financial system. According to Brazilian Central Bank, the sectors most affected are trade, services, transportation, the manufacturing industry, electricity and gas.

Government studies investment of $ 3.5 bn for credit to medium-sized companies

The government is studying an investment of R$ 20 billion ($3.5 billion) from the Treasury in the Guarantee Fund for Investments (FGI) of the National Bank for Economic and Social Development (BNDES) to boost credit to medium-sized companies amid the coronavirus crisis, but awaits the outcome of the negotiations on aid to states to find out how much they can actually commit, said three knowledgeable sources.

Road concessions suffer from record drop in traffic in 18.4%

The economic crisis triggered by the coronavirus already has an impact on the road concession sector and will require a review of contracts, according to industry experts. The movement of concessioned roads decreased by an average of 18.4% in March. The flow of passenger vehicles registered the biggest drop: 22.7%. Cargo vehicle traffic decreased 4.1%.

Deficit in external accounts totals $15.2 billion in the first quarter

Brazil’s external accounts registered a deficit of $ 15.242 billion in the first quarter of this year, with an increase of 1.32% compared to the same period in 2019. It was the biggest gap for the period since 2015. The current account deficit, one of the main on the country’s external sector, is formed by the trade balance (trade of products between Brazil and other countries), services (acquired by Brazilians abroad) and income (interest remittances, profits and dividends from Brazil abroad).

BNDES releases $ 200mm SME’s companies affected by coronavirus

The BNDES has already released R$ 1.1 billion ($ 200 million) for micro, small and medium-sized companies affected by the economic effects of the coronavirus pandemic, equivalent to about 20% of a working capital line reserved for the segment. Most of the funds (65%) were released to companies in the Southeast region. The average value of operations was R$ 368 thousand ($ 66K), the bank said.

Itaú BBA cuts Ibovespa projection to 90,000 points in 2020

Itaú BBA’s strategy team cut the projection for the Ibovespa from 94 thousand points to 90 thousand points, after having more drastically reduced expectations on March 24 for the stock market benchmark from 132 thousand to 94 thousand points. However, it is worth noting that this target still represents a positive variation of 13.93% compared to Friday’s closing (17).

$ 27 bn target on privatisation will not be met

The government should not sell any more assets until the end of this year due to the scenario of crisis and volatility with the coronavirus, the goal of selling R$150 billion ($ 27 billion) in assets this year will not be reached, pointing out that there is no climate or environment for privatisation. Situation that also played the privatisation of Eletrobras for 2021, said the Special Secretary of Privatisation of the Ministry of Economy, Salim Mattar.