Hi all. With a HUGE vote of thanks to those who have been following this Blog, I fear I have to close it down for now.
Circumstances may allow me to kick off again in the new year....as 2014 has the potential to be a particularly important year for Brazil and I would love to be able to chat about progress, or otherwise, with you.
Fingers crossed for a resumption in the new year. Have a wonderful Festive Season and New Year.
(my other Blog, Gay Issues and Life Experiences, will continue and can be found at http://gaylifeexperience.blogspot.com.br/)
Wednesday, 11 December 2013
Wednesday, 4 December 2013
Strengthening, Irrespective.....
Hi. As we hit the half way point in the conventional working week, I hope it is treating you respectfully and I am most grateful to you for joining us for this post.
After the shaky period of the June and July protests, President Dilma Rousseff's position seems to be strengthening in the polls, month on month. From October's 42% polling in the most likely scenario for the first round vote, her numbers have increased to 47%. Her nearest likely rivals, Senator Aecio Neves and Governor Eduardo Campos show at 19% and 11% respectively (21% and 15% in October).
We have discussed the idea that the election is all but in the bag for Pres Dilma in the post, 'Hers to Lose?' on 22/11 and, notwithstanding her poll results, the concerns for events to ambush her campaign in 2014 are only underlined by news report after news report on the key issue of the economy; with the ability to deliver on just about everything else depending on the recovery and re-launch of the same.
Figures for the third quarter show that the economy actually shrank by 0.5%. While the year on year figure sounds more promising, at 2.2%, the quarterly drop is reflected in the fact that the year on year figures were expected to be 2.4% or better. Of particular concern was an area I have highlighted previously, investment. The third quarter came in at a 2.2% fall in investment. The significant danger with such results is that they both reflect the poor investment climate and feed it. An economy risks suffering from a self fulfilling prophecy, a downward spiral out of which it is difficult to climb particularly if, as many expect, Brazil's credit rating is downgraded next year. One report highlighted the, '....stifling business costs...', as one of the major causes of the reluctance to invest in the country and we have addressed that issue at length in earlier posts.
Such concerns will not be helped by this week's announcement of a price rise in petrol/gasoline, which is now going up to over $5 a gallon. While Brazil is a major oil producer, it is well short of the refining capacity needed to meet the country's needs and has to import the refined product from elsewhere at market prices. Increased fuel costs are almost certain to be passed on to the consumer and further fuel inflation numbers that are already worrying and led to the sixth rise in Brazil's Central Bank rate the Selec, taking the cost of borrowing up to double figures. The Government will have been only too well aware of the potential damage that may result from the fuel rise, but will have been persuaded by the need to bolster the position of the 'cash poor' national oil giant Petrobras. Petrobras is the lead company in the development of huge pre-sal oil fields such as the Libra field, that promise so much for the future. The problem for the company is found in the here and now, however. Despite considerable assets, it is (relatively) cash poor for the task ahead and has been selling off foreign assets and, reportedly, considering delaying or cancelling the development of fields that are easier to exploit in order to channel all available funds to Libra.
There are, notwithstanding the above, some positive areas of the economy. Unemployment is at an almost record low and property prices are booming....though one always fears what may follow a boom! Real estate prices have rocketed by about 200% from the 2008 levels and while many, understandably, revel in the trade others sound a note of caution if not concern. The Nobel Laureate, Robert Shiller, said of visiting Brazil to examine the property market that, ''....I felt a bit like the USA of 2004...''! Other analysts talk of Brazil having 'drastically' high prices and, of course, the fear that this is not sustainable growth but a bubble that cold burst.
I noted Brazil's Finance Minister's comment this week, that, ''....2013 is still a year in crisis, probably the last one. We expect better scenarios next year....''. I cross my fingers that his employment of 'probably' and 'expect' is apposite, but rather think that others would transpose 'possibly' and 'hope' into those sentences.
Unless a significant improvement can be achieved during next year one might expect President Dilma's numbers to drop and her chances to be threatened....but, despite the logic of the assertion, that may not be the case. In this country where it is a challenge to find respected politicians who are in the game to serve others, rather than themselves, and who are free of the stain of corruption President Dilma is one of the few mainstream actors who scores well amongst the people in those areas. Even if they criticise her ability to deliver, there is something of an expectation that she is 'meant' to win a second term....added to the fact that there seems to be no credible alternative!
Less than a year to run. We shall see.
Thanks for joining me and I trust you will consider doing so again next week....when the post will be on policing in Brazil, about which chillingly disturbing news has come out in recent days.
Dave
After the shaky period of the June and July protests, President Dilma Rousseff's position seems to be strengthening in the polls, month on month. From October's 42% polling in the most likely scenario for the first round vote, her numbers have increased to 47%. Her nearest likely rivals, Senator Aecio Neves and Governor Eduardo Campos show at 19% and 11% respectively (21% and 15% in October).
We have discussed the idea that the election is all but in the bag for Pres Dilma in the post, 'Hers to Lose?' on 22/11 and, notwithstanding her poll results, the concerns for events to ambush her campaign in 2014 are only underlined by news report after news report on the key issue of the economy; with the ability to deliver on just about everything else depending on the recovery and re-launch of the same.
Figures for the third quarter show that the economy actually shrank by 0.5%. While the year on year figure sounds more promising, at 2.2%, the quarterly drop is reflected in the fact that the year on year figures were expected to be 2.4% or better. Of particular concern was an area I have highlighted previously, investment. The third quarter came in at a 2.2% fall in investment. The significant danger with such results is that they both reflect the poor investment climate and feed it. An economy risks suffering from a self fulfilling prophecy, a downward spiral out of which it is difficult to climb particularly if, as many expect, Brazil's credit rating is downgraded next year. One report highlighted the, '....stifling business costs...', as one of the major causes of the reluctance to invest in the country and we have addressed that issue at length in earlier posts.
Such concerns will not be helped by this week's announcement of a price rise in petrol/gasoline, which is now going up to over $5 a gallon. While Brazil is a major oil producer, it is well short of the refining capacity needed to meet the country's needs and has to import the refined product from elsewhere at market prices. Increased fuel costs are almost certain to be passed on to the consumer and further fuel inflation numbers that are already worrying and led to the sixth rise in Brazil's Central Bank rate the Selec, taking the cost of borrowing up to double figures. The Government will have been only too well aware of the potential damage that may result from the fuel rise, but will have been persuaded by the need to bolster the position of the 'cash poor' national oil giant Petrobras. Petrobras is the lead company in the development of huge pre-sal oil fields such as the Libra field, that promise so much for the future. The problem for the company is found in the here and now, however. Despite considerable assets, it is (relatively) cash poor for the task ahead and has been selling off foreign assets and, reportedly, considering delaying or cancelling the development of fields that are easier to exploit in order to channel all available funds to Libra.
There are, notwithstanding the above, some positive areas of the economy. Unemployment is at an almost record low and property prices are booming....though one always fears what may follow a boom! Real estate prices have rocketed by about 200% from the 2008 levels and while many, understandably, revel in the trade others sound a note of caution if not concern. The Nobel Laureate, Robert Shiller, said of visiting Brazil to examine the property market that, ''....I felt a bit like the USA of 2004...''! Other analysts talk of Brazil having 'drastically' high prices and, of course, the fear that this is not sustainable growth but a bubble that cold burst.
I noted Brazil's Finance Minister's comment this week, that, ''....2013 is still a year in crisis, probably the last one. We expect better scenarios next year....''. I cross my fingers that his employment of 'probably' and 'expect' is apposite, but rather think that others would transpose 'possibly' and 'hope' into those sentences.
Unless a significant improvement can be achieved during next year one might expect President Dilma's numbers to drop and her chances to be threatened....but, despite the logic of the assertion, that may not be the case. In this country where it is a challenge to find respected politicians who are in the game to serve others, rather than themselves, and who are free of the stain of corruption President Dilma is one of the few mainstream actors who scores well amongst the people in those areas. Even if they criticise her ability to deliver, there is something of an expectation that she is 'meant' to win a second term....added to the fact that there seems to be no credible alternative!
Less than a year to run. We shall see.
Thanks for joining me and I trust you will consider doing so again next week....when the post will be on policing in Brazil, about which chillingly disturbing news has come out in recent days.
Dave
Subscribe to:
Posts (Atom)