Analysts expect Latin America’s biggest economy to shrink 0.30% in 2009, compared with a previous forecast of a 0.39% contraction a week earlier, according to the median estimate in an April 30 central bank survey of about 100. In the bank’s April 17 survey, economists forecast a 0.49% contraction for 2009.
Brazil will not tap a new sovereign wealth fund for key investment projects this year even though the economy may miss an official 2% growth forecast, Planning Minister Paulo Bernardo said. Bernardo acknowledged that Latin America's largest economy could fall short of the government's forecast for 2% growth in 2009. Still, he expected the economy keep growing and avoid some market predictions it could contract 0.3%.
Brazil's foreign trade surplus widened in April to $3.71 billion from $1.77 billion in March, and beat analyst expectations of $2.84 billion. The surplus in April 2008 was $1.74 billion. In April, Brazilian exports were $12.32 billion, down from $14.06 billion in April 2008. Imports were only $8.61 billion, down sharply from the figure of $12.32 billion in April a year ago.
Brazil said it will pay growers as much as 23% more than the current benchmark to help push up prices. Brazil will buy as many as 3 million bags of arabica coffee from November to March for 303 reais ($143) to 320 reais a bag. A bag weighs 60 kilograms, or 132 pounds. Brazil exported about 26.1 million bags last year.
Petrobras hopes to raise a loan from the China Development Bank, its CEO said on Tuesday, to guarantee financing in 2010-2011 for an aggressive investment plan. Brazil signed an agreement on February 19 to supply China with 100,000 to 160,000 barrels of oil a day in what Petrobras expects to lead to $10 billion in financing to develop its huge subsalt oil fields.
BlackRock is overweight Brazil by about 6 to 7 percentage points, according to MSCI's Latin America index, a regional benchmark, and underweight Mexico by 3 to 4 percentage points. Brazil makes up 65% and Mexico 22% of the index. "Clearly for us, over the last six months, Brazil has been our preference over Mexico," said Will Landers, a managing director at BlackRock, who oversees about $4 billion in regional equities.
Foreign investors bought 3.1 billion reais ($1.5 billion) more in stocks than they sold last month, the largest monthly net inflow since April 2008, according to data compiled by the Sao Paulo-based exchange BM&FBovespa SA through April 28.
Source: Brazil Economic Scan
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