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From the Media

Aug 13, 2020 - Bloomberg

A series of high-profile resignations from Brazil’s economic team have left Economy Minister Paulo Guedes shaken but committed to keep pushing for reforms in the government. The losses are also the most visible sign yet that Guedes’ ambitious economic agenda is suffering a downgrade in size and scope, although his austerity drive received a crucial backing from President Jair Bolsonaro and congressional leaders. In a joint statement to the press late on Wednesday, Bolsonaro, Lower House Speaker Rodrigo Maia and Senate President Davi Alcolumbre pledged to uphold Guedes’ fiscal plans, and in particular a spending cap law that freezes public expenditures for two decades. It was a rare show of support for the minister, nearly 24 hours after news of an exodus from his team raised questions about the future of his reforms.

Aug 13, 2020 - Reuters

Brazil is amassing a record debt that has evoked memories of crises past in South America’s largest economy, but some economists say rock-bottom interest rates and low foreign debt mean the government can continue to spend its way out of recession. The debate in Brazil about getting the public finances in order is cranking up, with a key government fiscal rule looking set to be broken. Brazil is on course to post a record 800 billion reais (US$ 115 billion) budget deficit this year due to crisis-fighting expenditure, swelling the national debt to a high of around 95% of gross domestic product - an exceptional level for an emerging market economy.

Aug 13, 2020 - Climate Home News

President Jair Bolsonaro could revive Brazil’s economic growth more quickly after Covid-19 by shifting to low-carbon policies that safeguard the Amazon rainforest, an international report said on Thursday. The study, by the New Climate Economy and World Resources Institute think-tanks in partnership with former finance ministers and World Bank executives, proposed measures including reduced deforestation, more sustainable agriculture, less-polluting energies and wider electrification of the vehicle fleet. For transport, the report encouraged a shift to greater use of Brazil’s natural gas for the shipping industry, a less polluting option than bunker fuel. And it said that Brazil could build more electric buses, perhaps opening export markets.

Aug 13, 2020 - Argus Media

The Brazilian government's plan to sell state-owned pre-salt marketing company PPSA has stalled amid congressional foot-dragging over a change in pre-salt contract terms. Addressing reporters, influential economy minister Paulo Guedes confirmed the delay in selling the firm contributed to the departure of secretary Salim Mattar, one of two ministers resignations this week. PPSA is one of numerous state-owned assets that Brazil is offering for sale. But the privatization drive faces resistance from legislators. Guedes said he would prefer to privatize all state-owned companies to help stabilize Brazil's finances amid the Covid-19 pandemic, but was focused on two or three key assets, including PPSA.