Diplomacia e Relações Internacionais
Brazil's government is set to launch the first in a series of measures that could inject up to $50bn (£32bn) into the economy over the next five years. The first part of the plan, to be announced on Wednesday, includes privatising about 14,000 kilometres of railways and roads.
The privatisation of ports, lower energy costs and incentives for industry will soon follow.
The package is designed to boost what have been disappointing growth levels.
President Dilma Rousseff has invited 50 leading Brazilian businessmen to the capital Brasilia where she will personally launch the new strategy.
In May, she brought the businessmen to the presidential palace - the Planalto - to ask them what was needed to stimulate the economy.
Growth in Brazil is predicted to be under 2% this year, the weakest annual performance since 2009 and a sharp slowdown from an impressive 7.5% rise in 2010.
Rising debt rates Prior to these measures, the government had been counting mainly on rising levels of domestic consumption - fuelled by credit growth and rising income among poor Brazilians - alongside investments by state companies.
Expensive energy, poor infrastructure and increasing labour costs - known here as 'Custo Brasil' or the 'Brazil Cost' - have also weighed on growth, analysts say.
Now the government will increase the role played by private investors, who were seen to have lost ground during the government of Luiz Inacio Lula da Silva, Brazil's president from 2003-2010.
President Rousseff was his chosen successor, but she is seen as a tough and pragmatic decision maker when it comes to economic policy.
In February, the government granted three of the largest airports in the country to private companies, hoping to improve overstretched facilities before the 2014 Football World Cup.
Boosting investment Now roads, railways, ports and perhaps other airports will also be privatised. President Rousseff hopes these concessions will also help to improve the country's much-criticised infrastructure.
"The government realized that privatisations are a way to boost investment", says Felipe Salto, an economist at Tendencias, a leading consulting firm in Brazil.
The concessions are expected to attract up to $50bn in investments in five years.
Rousseff is also preparing to lower the price of energy for industry with the abolition of some federal taxes, which could cut the price by 10%.
Further extensive reductions would depend on tough negotiations with governors and politicians across the country.
Economists are worried, however, about a new round of tax reductions for industry that should be announced in the coming weeks.
"Without structural changes, they could even generate demand and short-term growth, but also cause higher inflation", says Mr Salto.
The measures, he says, would also affect the fiscal balance.
"Comprehensive stimulus measures could harm the efforts to bring down public debt, leading to imbalance in government accounts."
Late diagnosis For economist Silvia Matos, professor at Getulio Vargas Foundation, "the new package shows that the government is convinced that the economy faces a structural problem.
"The diagnosis is correct, but took too long to be made."
According to Ms Matos, previous economic steps taken by the government this year, such as reducing taxes on cars, were not enough to lift GDP.
Not even the recent devaluation of the currency, the real, and the progressive reduction in interest rates, have produced significant effects so far.
According to the National Confederation of Industry, 11 of the 19 industrial sectors they were tracking suffered a drop in capacity in 2011, indicating a cooling in industrial activity.
Ms Matos believes the new package will tackle some key economic problems, but says Brazil faces other serious issues such as increased public spending and an inefficient tax system.
Without reforms in these areas, she says, the country's economy will remain vulnerable.
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Diplomacia e Relações Internacionais
Interventionist Brazil: State acknowledges its inneficiency
Brazil changes tack with new stimulus plan
Brazil's government is set to launch the first in a series of measures that could inject up to $50bn (£32bn) into the economy over the next five years. The first part of the plan, to be announced on Wednesday, includes privatising about 14,000 kilometres of railways and roads.
The privatisation of ports, lower energy costs and incentives for industry will soon follow.
The package is designed to boost what have been disappointing growth levels.
President Dilma Rousseff has invited 50 leading Brazilian businessmen to the capital Brasilia where she will personally launch the new strategy.
In May, she brought the businessmen to the presidential palace - the Planalto - to ask them what was needed to stimulate the economy.
Growth in Brazil is predicted to be under 2% this year, the weakest annual performance since 2009 and a sharp slowdown from an impressive 7.5% rise in 2010.
Rising debt rates Prior to these measures, the government had been counting mainly on rising levels of domestic consumption - fuelled by credit growth and rising income among poor Brazilians - alongside investments by state companies.
Although the previous strategy had helped Brazil become the sixth largest economy in the world in 2011, overtaking Britain, the government has not been able to maintain high growth rates.
The recent weak growth has been attributed mainly to rising debt rates among the population and the global downturn, which reduced demand for Brazilian products.Expensive energy, poor infrastructure and increasing labour costs - known here as 'Custo Brasil' or the 'Brazil Cost' - have also weighed on growth, analysts say.
Now the government will increase the role played by private investors, who were seen to have lost ground during the government of Luiz Inacio Lula da Silva, Brazil's president from 2003-2010.
President Rousseff was his chosen successor, but she is seen as a tough and pragmatic decision maker when it comes to economic policy.
In February, the government granted three of the largest airports in the country to private companies, hoping to improve overstretched facilities before the 2014 Football World Cup.
Boosting investment Now roads, railways, ports and perhaps other airports will also be privatised. President Rousseff hopes these concessions will also help to improve the country's much-criticised infrastructure.
"The government realized that privatisations are a way to boost investment", says Felipe Salto, an economist at Tendencias, a leading consulting firm in Brazil.
The concessions are expected to attract up to $50bn in investments in five years.
Rousseff is also preparing to lower the price of energy for industry with the abolition of some federal taxes, which could cut the price by 10%.
Further extensive reductions would depend on tough negotiations with governors and politicians across the country.
Economists are worried, however, about a new round of tax reductions for industry that should be announced in the coming weeks.
"Without structural changes, they could even generate demand and short-term growth, but also cause higher inflation", says Mr Salto.
The measures, he says, would also affect the fiscal balance.
"Comprehensive stimulus measures could harm the efforts to bring down public debt, leading to imbalance in government accounts."
Late diagnosis For economist Silvia Matos, professor at Getulio Vargas Foundation, "the new package shows that the government is convinced that the economy faces a structural problem.
"The diagnosis is correct, but took too long to be made."
According to Ms Matos, previous economic steps taken by the government this year, such as reducing taxes on cars, were not enough to lift GDP.
Not even the recent devaluation of the currency, the real, and the progressive reduction in interest rates, have produced significant effects so far.
According to the National Confederation of Industry, 11 of the 19 industrial sectors they were tracking suffered a drop in capacity in 2011, indicating a cooling in industrial activity.
Ms Matos believes the new package will tackle some key economic problems, but says Brazil faces other serious issues such as increased public spending and an inefficient tax system.
Without reforms in these areas, she says, the country's economy will remain vulnerable.
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- Eleicoes 2014: Um Possivel Ministro Da Fazenda, Arminio Fraga - The Wall Street Journal
Politics Brazil Ex-Insider Returns to Help Oust President Luciana Magalhães The Wall Street Journal, August 12, 2014 With slow growth and high inflation hurting Brazilian President Dilma Rousseff's chances of winning a second term, a financial heavyweight...
- Economist Intelligence Unit Analisa A Economia Brasileira
Números medíocres, para dizer o mínimo. Em face disso, discursos e tentativa de estimular novamente o crédito. Mas, não é pecado perguntar: de onde sai o crédito, mesmo? Paulo Roberto de Almeida Brazil economy: First-quarter GDP disappoints June...
- Economia Brasileira: Um Editorial Realista Da Economist
The Brazil backlashIts strengths are real, but the government should worry more about its weaknessesThe Economist, May 19th 2012 NOT long ago, the BRICs were lionised as fast-growing superpowers-in-waiting. These days Russia is portrayed as a corrupt...
- Brazilian Economy - The New York Times
After a Year in Economic Overdrive, Brazil Hopes to Elude Pitfalls By ALEXEI BARRIONUEVOThe New York Times, October 8. 2011SÃO PAULO, Brazil — In the first major test of her stewardship of Latin America’s largest economy, President Dilma...
- Uma Bolha Economica Chamada Brasil - The Economist
A economia brasileira vem crescendo, de fato, mas nem sempre de forma saudável. Excesso de crédito público, maquiagens contábeis do governo para esconder empréstimos do Tesouro ao BNDES, juros aumentando, enorme custo fiscal das reservas internacionais,...