In today’s issue: Despite rising profits, companies aren’t investing more. Can the government suppress the crisis? Brazilian middle-class buying more real estate.
Despite rising profits, companies aren’t investing more
Brazilian companies have seen their profitability go up—while interest rates and companies’ cost of capital went down. Still, companies’ investments are not increasing at the level which would be expected in such a favorable scenario. According to Fipe (the Institute for Economic Research), this is down to doubts regarding the government’s ability to pass the pension reform, coupled with a high idle capacity leftover from the recession.