Author: Richard Mann

Brazil is gearing up for 2024 with a strong economic foundation, but UBS BB is warning of potential headwinds ahead. The forecast predicts a modest 0.4% growth in the second quarter, attributing it to decreased consumer spending and lower investments. UBS BB, the Brazilian arm of UBS Group, plays a crucial role in shaping economic trends and investment decisions in Latin America with its expertise in investment banking. Despite some signs of recovery in 2023, the Brazilian economy is facing challenges this year with declining investment rates that could hamper future growth prospects. The nation’s struggle to maintain strong investment…

In 2023, half of Brazil’s municipalities were in dire fiscal straits, with a staggering deficit of R$17.9 billion ($3.42 billion) reported by the National Confederation of Municipalities (CNM). The main culprits behind this financial crisis were declining transfer revenues and mounting public expenses, worsened by the post-pandemic recovery and a weakening federal pact. Budget expert Cesar Lima pointed out that municipalities were facing reduced revenue while being burdened with increasing services mandated by federal laws. The study also highlighted the disparity between federal contributions and municipal expenses, with the government providing inadequate support for essential services like school transportation. As…

Chile’s economy has faced a contraction for two consecutive months, primarily due to declines in mining and commerce, impacting overall growth. The Monthly Economic Activity Indicator for April fell by 0.3%, less than the expected 0.6%, indicating a slowdown in economic activity. Despite a 3.5% rise in activity compared to last year, challenges persist, with informal employment on the rise even as formal unemployment rates decrease. The second quarter of 2021 shows a deceleration in economic growth, despite lower interest rates and a surge in copper prices. April saw declines in mining and commerce, although retail sales surged as predicted.…

Brazil’s Central Bank has surprised the market by projecting a benchmark interest rate of 10.25% for 2024, indicating a slight decrease from current levels. This decision has far-reaching implications, influencing everything from mortgage rates to business borrowing costs. Published in the June 3, 2024, Focus Report, these forecasts are more than just numbers on a page; they represent a strategic response to Brazil’s economic conditions. Inflation is expected to edge up to 3.88% by 2024, with modest increases projected through 2026. Finance Minister Fernando Haddad has acknowledged the challenges of managing economic stability within the 1.5% to 4.5% inflation range…

Brazil’s National Treasury reported a primary surplus of R$11.1 billion ($2.14 billion) for the central government in April, slightly falling short of analyst expectations. The economic team now projects a primary deficit of R$14.5 billion ($2.80 billion) for 2024, despite an increase in tax collections by 10.6% compared to the previous year. The surplus boost was mainly driven by higher PIS/Cofins taxes and Social Security contributions, but increased disbursements for Social Security benefits also played a role. Year-to-date figures showed a cumulative surplus of R$30.605 billion ($5.91 billion), a decline from the same period in 2023. Additionally, over the past…

Petrobras’s new president, Magda Chambriard, is driving an aggressive strategy to accelerate oil exploration in Brazil to secure the country’s energy reserves. Despite environmental concerns following recent floods in Rio Grande do Sul, Chambriard is determined to find new oil reserves along the equatorial margin to avoid reliance on imports. While emphasizing the need to replenish reserves, Chambriard also aims to decarbonize the sector but maintains a strong focus on oil exploration. The government expects her to prioritize projects like repurchasing refineries and supporting a gas-chemical hub in Minas Gerais. Chambriard is committed to maintaining the current fuel pricing policy…

Argentine President Javier Milei is embarking on a significant trip to the United States on May 27th to meet with tech industry leaders. This visit coincides with crucial Senate discussions on the Framework Law and fiscal package back home. Milei’s itinerary includes meetings with tech giants Mark Zuckerberg and Elon Musk, followed by a technology conference in Silicon Valley on May 30th to explore AI investments with companies like OpenAI, Apple, and Alphabet. Additionally, Milei will attend Nayib Bukele’s inauguration in El Salvador on June 1st, marking a significant political event in the region. Why It Matters Milei’s interactions with…

In a surprising announcement at a Rio de Janeiro conference, the Brazilian government revealed that the second quarter’s GDP might experience a decline due to catastrophic floods in Rio Grande do Sul, a key economic region in the south. Planning Minister Simone Tebet shared the news, emphasizing the severe impact of the floods on the region while expressing hope for a recovery by the year’s end through targeted government stimulus. Despite the short-term downturn, analysts remain optimistic about a swift revival, crucial for a region known for its contributions to Brazil’s agricultural and industrial sectors. The government projects a 2.5%…

Mexico’s economy grew by a modest 1.6% in early 2024, slightly exceeding expectations as a presidential election approaches. The GDP increased by 0.3% from the previous quarter, but challenges like weak export demand and harsh weather hampered progress. The central bank’s high borrowing rates and government spending efforts had limited economic impact. Mexico’s Economic Growth Slows to 1.6%: Challenges for the Incoming Government. (Photo Internet reproduction) The strong Mexican peso and droughts due to scorching heat pose further challenges, possibly impacting future economic figures. However, analysts predict a GDP rise to 2.2% in 2024, driven by potential interest rate cuts…

Governor Tarcísio de Freitas is launching a groundbreaking plan to revolutionize São Paulo’s economy, potentially saving up to R$20 billion ($3.88 billion) annually. The ambitious initiative focuses on reducing public spending, increasing investments, and improving the business environment. A key component of the plan is the restructuring of tax incentives for businesses, with the aim of generating an additional R$15 billion to R$20 billion ($2.91 billion to $3.88 billion) per year. Already, the plan has resulted in the non-renewal of one-third of expired benefits in April, bringing in an extra R$400 million ($77.67 million) annually. Another significant aspect of the…