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Retail figures highlight Brazil’s underwhelming 2021 Black Friday

Euan Marshall
Jan 14, 2022 10:05

Data published today by the National Institute of Geography and Statistics (IBGE) shows that Brazil’s retail sales volume increased just 0.6 percent in November 2021, compared to one month before. November coincides with Black Friday, which in recent years has become one of the most important shopping dates for Brazil.

The paltry growth highlights just how underwhelming the event was in 2021. Furthermore, despite the overall increase, more than half of the retail sectors analyzed by IBGE saw negative results during the month.

As we pointed out at the time, November’s retail growth was largely led by food and drink and supermarket sales indicating that Brazilian Black Friday consumers made use of the event to purchase basic items, as opposed to more expensive electronics and furniture — a sector which contracted 2.3 percent during the period.

Confidence levels within Brazilian industry at five-year low

Gustavo Ribeiro
Jan 13, 2022 13:47

A survey by the National Confederation of Industry (CNI) shows that confidence levels within Brazilian industry fell to their lowest levels in five years. 

The organization’s most recent report shows that Brazilian business owners are starting 2022 less hopeful than in previous years, but also with less optimism compared to December 2021. The industrial confidence index for January is at the lowest level compared to the same months in 2018, 2019, 2020, and 2021.

The beginning of 2022 has affected global markets due to the spread of the Omicron coronavirus variant. In Brazil, for example, the rapid increase in cases has altered schedules in the domestic air travel industry.

Big Center tightens grip over the federal budget

André Spigariol
Jan 13, 2022 12:41

President Jair Bolsonaro signed a decree decentralizing control over the federal budget. While this is a customary move to facilitate government functioning, the president added a provision which strips Economy Minister Paulo Guedes’s power to have the final say on budgetary decisions. 

Instead, that control is passed on to Chief of Staff Ciro Nogueira, a prominent leader within the “Big Center,” a federation of conservative rentier parties which have been the bedrock of Mr. Bolsonaro’s loose congressional coalition.

With his increased powers, Mr. Nogueira will now be able to use federal funds as a bargaining chip in negotiations with political parties. His Progressives (PP) party — to which the House Speaker also belongs — has jacked up spending on congressional budgetary grants, tools used by lawmakers to finance projects within their constituencies for political gain.

With the elections just nine months away, giving the PP party the keys to the budget could mean opening up the spending floodgates. “This is a bad idea that leaves the budgetary execution board subject to political interests,” one seasoned Congress budget analyst told The Brazilian Report.

Since taking office, Economy Minister Paulo Guedes has tussled with congressional leaders over the power to dictate economic policy. And the politicians have beaten the ultra-liberal economist at almost every step of the way.

Service sector grows in November after two-month skid

Ana Ferraz
Jan 13, 2022 12:34

Brazil’s services sector reported 2.4-percent growth in November from one month prior. The result surpassed expectations and put an end to a two-month downturn, recovering from an accumulated loss of 2.2 percent. The overall service sector’s output is now 4.5 percent above pre-pandemic levels — but still 7.3 percent below its November 2014 peak.

“This recovery in November also places the sector at the highest level of the last six years, equaling the level of December 2015,” highlighted Rodrigo Lobo, a researcher at the Brazilian Institute of Geography and Statistics.

Of the five segments monitored by the survey, four rose in November, with information and communication services being the highlight, with a 5.4-percent increase.

Over 700 Brazilian cities under a state of emergency in 2022

Lucas Berti
Jan 13, 2022 11:12

At least 549 cities in nine of 27 states have declared a state of emergency due to problems caused by calamitous floods sweeping multiple parts of Brazil’s Northeast and Southeast. Additionally, 200 cities in the southern state of Rio Grande do Sul are in a similar situation, due to severe droughts.

Minas Gerais and Bahia have been the worst-affected states by heavy rains, with 341 and 175 municipalities under a state of emergency, respectively. Floods and other disasters have killed dozens, driven over 133,000 from their homes, and affected infrastructure. 

Minas Gerais state is the most affected by the rains, and is home to the country’s three most at-risk tailings dams, renewing traumas in a region which has experienced two catastrophic dam collapses since 2015.

The number of cities under a state of emergency accounts for almost 14 percent of all Brazilian municipalities.In Rio Grande do Sul, the lack of rains has disrupted crops, and Agriculture Minister Tereza Cristina visited soybean producers to assess the damage. Argentinian consultancy firm Agripac estimates that soybean production in Mercosur countries has already lost 19 million tons due to extreme heat waves.

World Bank lowers growth expectations for Brazil

Ana Ferraz
Jan 12, 2022 13:02 (Updated: Jan 12, 2022 13:03)

The World Bank lowered its forecast for Brazil’s 2022 GDP growth from 2.5 to 1.4 percent, according to its global economic outlook report. If expectations are confirmed, Brazil would be the lowest-performing country among 18 emerging markets — only faring better than crisis-plagued Haiti.

The bank expects sharp economic deceleration as “private consumption is expected to soften substantially in 2022 as high inflation diminishes purchasing power and labor market conditions improve only sluggishly.” In this regard, the World Bank highlights the country’s “stubbornly high” unemployment rate, which sat at more than 12 percent in the second half of 2021. 

The bank also draws attention to fears about the impact of China’s slowing growth on Brazil’s commodity exports. As bad as they are, the World Bank’s projections are more optimistic than those of Brazilian market agents. Per the Central Bank’s latest Focus Report survey, Brazilian GDP is set to grow just 0.28 percent this year.

Bolsonaro to skip Gabriel Boric’s inauguration in Chile

André Spigariol
Jan 12, 2022 12:34

President Jair Bolsonaro announced on Wednesday that he will not attend the inauguration of Chile’s left-wing president-elect Gabriel Boric, scheduled for March 11. “I will not go into details so as not to create foreign relations problems, but who will attend the inauguration of the new Chilean president? I won’t,” said the far-right leader, during a radio interview.

Mr. Bolsonaro’s decision is motivated by the fact that Mr. Boric’s coalition has developed strong ties with the Brazilian left, which The Brazilian Report showed in December. Luiz Inácio Lula da Silva — the center-left former president who leads all polls ahead of the October election — is expected to attend the inauguration ceremony, as will Randolfe Rodrigues, the opposition whip in the Senate. 

Chilean officials told The Brazilian Report that the country’s government has been cautious about inviting international leaders to the ceremony as a result of a spike in Omicron cases, which has countries scrambling to avoid the collapse of local health systems.

Supreme Court extends probe into pro-Bolsonaro digital troll armies

TBR Newsroom
Jan 11, 2022 16:55

Supreme Court Justice Alexandre de Moraes issued a 90-day extension for a probe into online troll armies flooding the Brazilian public discourse with false information. This is the second time Justice Moraes has extended the investigation.

The probe began last year as part of an effort to discover who was funding protests calling for President Jair Bolsonaro to shut down the Supreme Court and Congress. The Federal Prosecution Office recommended shelving the case, but the Federal Police found evidence of underground fake news-spreading networks — which motivated the Supreme Court to open new lines of investigation.

The inquiry scrutinizes alleged money transfers to offshore accounts owned by pro-Bolsonaro blog Terça Livre. Its owner, Allan dos Santos, is a fugitive of Brazilian justice. Mr. Santos had his arrest ordered by the Supreme Court, but fled Brazil to live in the U.S. — and the government has worked to keep him from being extradited.

Despite his status, he enjoys support from the federal government — and as recently as last week he participated in an event with Communications Minister Fábio Faria, organized by an evangelical church in Orlando.