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Brezilya Panoraması

Brezilya Panoraması

Brazil has grown over the last decade,  as  a  result  of  the boom  in  commodity  prices and  strong  household  consumption.  The  country endured  the  2008-2009 crisis,  thanks  to  liquidity  injections  from  public banks.  The  ratio  of  total  credit  to  GDP  rose significantly  during  the  6  ears  from  2008  to 2014,  from  39.7  %  to  54.7  %.  Moreover, benchmark  Selic  interest  rates  fell  to  their historic  lowest  level,  to  7.25  %  a.y.  in  October 2012. This improvement in credit conditions is in perfect  synergy  with  the  country’s  emerging middle  class.  However  this  movement  was  not followed  on  the  supply side.  Industry  became increasingly  vulnerable  to  imports,  due  to  the combination of Brazil’s weak infrastructure and high production costs. These weaknesses  were particularly  associated  with  the  country’s  labour force, as salaries increased well above productivity during the period


The government attempted to contain industry hemorrhaging by temporarily reducing taxes on sensitive sectors. However this succeeded only as a palliative measure and was not enough to boost activity, let alone to encourage investments. Activity has lost rhythm in recent years, as Brazil’s consumption-based growth model reached exhaustion and commodity prices declined. By 2014, it was clear that major changes to the economic model needed to be implemented - notwithstanding the fact that there would be presidential election in October of the same year. GDP growth stood at a meager 0.1
% in 2014, due to repressed inflation (artificially low energy and oil prices) and increasing public expenses (+ 1.3 %).

The year of 2015 began with Dilma Rousseff´s second Presidential term. She won the election, but was faced with a much tougher battle: to control inflation and the marked deterioration in public accounts. As yet, the government has failed to improve macroeconomic fundamentals. In early September, Standard & Poor’s downgraded Brazil to junk status. Coface also reviewed down the country risk assessment, from A4 to B (see table 1). The reasons leading to this decision will be more intensively explored within the first section of this panorama. The second section of this updated sector barometer reveals the effects of the recession, on a sector by sector basis. This information is based on Coface’s examination of the financial performances of companies in different industries, highlighting where risks have increased and where they have remained stable. Unsurprisingly, no segments reported improvements. Three industries - the automotive, construction and steel industries - were downgraded from high risk, to very high risk.

Bu yayını indir : Brezilya Panoraması (720,55 kB)



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