Impacts of the World Crisis in
the Brazilian Economy
Reasons for Stagnation in 2012
• Deepening of world crisis (especially in
Europe)
• Decrease in investments
• Production crises (overvalued currency)
• Weather problems that affected agriculture
Economic Figures
Market Expectations
2010
2011
2012
2013
Estimated
Official Interest Rate Average (%a.a.)
9,80
11,60
8,75
8,25**
Exchange Rate Average (R$/US$)
1,76
1,68
1,95
2,00
Inflation Rate - IPCA(%)
5,91
6,50
5,84
5,71
GDP* (% Growth)
7,50
2,70
0,90
3,00
GDP per capita
(thousand R$)
19,51
21,5
22,7
23,2
Fonte: Banco Central do Brasil e Ministério da Fazenda
Elaboração: DIEESE
*Valores reais de 2012 pelo ICV
Expenditures with Interests
•
•
•
From April 2012 to March 2013, Brazil spent US$ 108,5 billions with
interest payments, US$10 billions less than on the same period of the
previous year.
In the same period, the official interest rate dropped from 9,75% to
7,25%.(SELIC)
The ammount saved (US$ 10 billions) is nearly enough to pay “Bolsa
Família” in 2013 (the main government social program aimed to help
poor families), estimated in US$ 11 billions, nearly four times the
necessary ammount to fund “Agricultura Familiar” (government
program aimed to support family owned agriculture business),
estimated in US$ 2,6 billions, and almost twice the ammount aimed to
fund college graduation investments in 2013, estimated in US$ 6,4
billions.
Expenditures with Interests
•
However the total expenditure with interest expense for the period is still
too high, being 4.4 times the amount budgeted in 2013 for education
(elementary and secondary, technical, professional and higher).
•
Brazil was in March the 5th place among the countries of higher real
interest rates in the world at the time the official rate was still 7.25%,,
according to the IMF and their central banks compiled and published on the
MoneYou website.
Who is benefited by high interest rates?
Fonte: Tesouro Nacional
Why did investments drop?
• Due to the global crisis and to low growth in
2011 companies have postponed investment
plans
• Macroeconomic Scenario in 2012 was more
uncertain and volatile, making business planning
more difficult
• The good news is that investments resumed to
grow in the last quarter of 2012 (0.5%)
• If it is sustainable, it is another story.
Immediate causes of the crisis in
production
• Decrease in investments
• Loss of competitiveness of the production
sector, with internal consequences (greater
demand of imported products in the domestic
market) and external ones (drop in exports of
manufactured products)
Government measures to revive the
Economy
• 1)Payroll tax reduction, covering 42 sectors (15 are
already being benefited). With this and other
exemptions, the government gave up around $ 22.5
billion in taxes in 2012
• 2) Increase in import taxes of several products
• 3) Reduction of electricity costs to the manufacturing
sector and households
• 4) Reduction of interest rates (the lowest levels in our
history)
• 5) Ambitious investment program in roads and railways,
with estimates of more than U$ 65 billion
Government measures to revive the
Economy
• 6) Set of measures that create a robust line of credit
offer and reduce tax collection to encourage the
construction industry (Dec/2012)
• 7) Financial costs for investments suffered a structural
readjustment (reduction in the official interest rates;
reduction in the interest rates of the Investment Support
Program (PSI) to 3.5% per year)
• 8) The PSI in 2013, will provide U$ 50 billion for
investments, with an average rate of around 3.5% per
year (low interest and long term deadlines)
Labour Market
Evolution of Formal Employment
Brazil, 2002 to 2011
The positive
difference between
hired and
dismissed workers
was 306 thousand
from Jan to Mar2013 (Caged)
Fonte: MTE, Rais
*MTE, CAGED
Elaboração: DIEESE
Unemployment rates - annual averages
Metropolitan regions and Federal District, 2000-2012
Em (%)
20.8
20.0
18.7
18.8
19.6
19.5
17.9
16.8
15.5
15.0
14.1
14.0
11.9
13.2
10.0
11.5
11.8
12.3
12.2
11.3
11.0
10.5
9.5
7.2
5.0
7.0
7.3
7.4
10.5
7.9
8.1
2.5
2.4
2011
2012
9.7
8.5
7.6
10.4
6.6
5.7
5.0
4.6
4.3
3.4
0.0
2000
2001
2002
Total
2003
2004
2005
2006
Aberto
2007
2008
2009
2010
Oculto
Fonte: Convênio Dieese/ Seade/ MTE - FAT e convênios regionais. Pesquisa de Emprego e Desemprego - PED.
(1) Correspondem ao total das Regiões Metropolitanas de BH, POA, Recife, Salvador, SP e o DF. A partir de 2009, inclui a Região
Metropolitana de Fortaleza
Total
unemployment
rate in January
2013 was 11%.
Evolution of Real Wages
Brazil, 2002-2012
(Abril de 2002=100)
180
168.08
170
160
153.40
145.51
150
137.28
140
132.27
126.02
130
120
110.85
110
100.53
102.72
100
90
80
Fonte: Ministério do Trabalho e Emprego
Elaboração: DIEESE
OBS: Em valores de março de 2013 – INPC/IBGE
152.05
169.96 168.07
Inflation
Inflation targeting regime: inflation, central
and target "ceiling“ (% per year)
Brazil, 1999 – 2013*
Em (%) ao ano
*Estimativa do IPCA-IBGE do Banco Central do Brasil para o ano.
Fonte: SIDRA-IBGE e BC.
Elaboração: DIEESE
Collective Bargaining
Distribution of wage increases, compared with the official
inflation rate (INPC-IBGE), and average real increase
Brazil, 1996 to 2012
100.0
51.9
43.5
35.1
51.5
43.2
25.8
18.8
54.9
71.7
86.3
87.7
76.6
79.4
90.0
60.0
23.0
0.30
0.36
0.24
14.6
0.30
19.8
3.9
27.7
15.2
-0.72
26.1
30.0
20.0
16.3
11.8
-2.08
10.0
0.0
0.89
19.6
-0.45
40.0
1.96
-0.01
15.5
50.0
0.61
0.86
0.78
94.6
1.33
1.22
70.0
86.9
1.66
1.52
80.0
87.8
44.2
45.3
36.7
50.3
33.3
37.2
46.5
58.2
19.0
12.0
10.7
3.1
8.3
4.1
11.6
11.8
8.8
7.8
4.4
7.0
6.1
1.3
4.1
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
231
reaj.
470
reaj.
324
reaj.
316
reaj.
Abaixo do INPC-IBGE
369
reaj.
495
reaj.
480
reaj.
548
reaj.
Igual ao INPC-IBGE
658
reaj.
640
reaj.
655
reaj.
715
reaj.
Acima do INPC-IBGE
819
reaj.
814
reaj.
803
reaj.
800
reaj.
Aumento real médio
704
reaj.
Collective Bargaining Trends in 2013
• • Objective: try to keep the gains achieved in the last three years (95% of
negotiations with increases above inflation and average real gain of 1.96%
in 2012, the highest percentage ever since analyses started)
• The economic situation is better than in 2012 and GDP is expected to
grow 3% or 3.5% in 2013
• • Exchange rate is most suitable for export competitiveness and the
inhibition of import of manufactured products
• • Real interest rates is at its lowest level in history, and despite the increase
occurred in April, it will remain at relatively low historical levels
• Inflation tends to stay within the margins set by the inflation target for
the tenth year in a row
1st NATIONAL CONFERENCE OF NATIONAL
FINANCIAL SYSTEM
Tripartite debate with the participation of civil society on
the following topics:
• Access to banking services and customers’ rights
• Access to credit, interest rates, spreads and bank fees
• Society control over the National Financial System
• Regulation of Constitutional Clause (Nº 192, 1988) which
states the principles of the National Financial System
st
1
Objectives of the Conference of
the National Financial System (NFS)
•Contribute with proposals for the construction of a
JOINT LEGISLATIVE AGENDA, oriented to the
democratization of the population access to the NFS;
•Expansion of productive credit, regulating key
variables of the NFS (interest rates, spreads and bank
fees);
•Protection of customers’ rights and promotion of a
NFS that focus on the country’s socio-economic
development and on collective interests
Thank you very much!
Muito obrigado!
www.contrafcut.org.br