Hello, this is Tokyo Consulting Firm Brazil’s Blog.
We are posting about “Brazilian Economy – A summary of what happened in 2018” in this time.
The year 2018 for the Brazilian economy can be classified as a weak year, that is, with little economic growth. There were commercial disputes and one of the strikes that most affected the country: The Truckers.
The market was slow to recover and, consequently, the increase in informality, as there were not many jobs offers and the citizens had to seek their income in some way. The year still had a strong impact on the instability of its financial market due to electoral uncertainties.
To give more clarity in the statements and more details, we will review some facts that occurred this year. The minimum wage readjustment was the lowest in 24 years. The government that was already in action to carry out the pension reform, abandoned it that would affect the INSS coffers. In relation to the foreign market, the US announced a rise in import duties, which directly affected Brazil with steel and aluminum exported.
One of the positive points in the same period was the appreciation of Petrobras, where it was once again the largest company in the stock market, taking with it the Ibovespa high, so logging the appreciation of the stock market. In mid-May, the truck drivers’ stoppage, directly affected the replacement of inputs and products in the country, consequently harming industries, commerce and agribusiness, since today the most used means of transportation for deliveries in the country is through the road. To try to remedy this shutdown the government announced the freezing of the diesel tariff and some other benefits that were also being requested. Meanwhile, during this whole mess affecting fuels, the current Petrobras commander resigned, causing the company’s shares to fall by 15%.
To try to revive the economy the government said, “Let’s inject money into the market”, around 40 million, for this was released the sack of PIS-PASEP for all ages. With the lack of job offer, the increase in informality was inevitable and without prospect for improvement, the number of defaulting families only increased.
To give a little more joy to Brazilian exporters, the US announces the easing of import surcharges to Brazil. Following months ahead, in the last quarter of the year, the eve of elections, the dollar quotation breaks record and arrives at BRL 4.19. And since the electoral tension has grown, the market reacts in the worst possible way. In return for the financial market, G20, the US and China are suspending measures taken during the year as high rates and this gives the market reaction forces. And to close the year, the president and vice president, Nissan and Huawei, consecutively, are arrested. The one from Nissan for being accused of misuse of company money. And Huawei’s deputy for violating sanctions imposed on Iran by the United States.
Katushi Hamasaki
