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Brazil Injecting $20b to Lift Economy
World Economy

Brazil Injecting $20b to Lift Economy

The Brazilian government announced on Thursday measures to boost production and recover the country’s growth, including a credit injection of 83 billion reals ($20.4 billion) into the economy.
Among the measures announced are investments in infrastructure and more available credit from state-run banks to small and medium sized companies and for important economic sectors such as agriculture and construction, NewsNow reported.
According to Finance Minister Nelson Barbosa, the measures will not incur extra costs for the government. “The greater part of the initiatives is administrative. There will be no additional cost for Brazilian taxpayers. We want to make better use of the available resources,” said Barbosa during a press conference to announce the measures.
In addition to freeing up credit for industry and agriculture, the government will also ask Congress to approve a measure that would allow laid off workers to use their FGTS (workers’ pension fund) as guarantee to obtain loans. According to Brazil’s Central Bank the total volume of credit offered by banks last year increased by only 6.6%, to 3.21 trillion reais, the lowest annual growth ever registered.
Overall the measures were well received by the Brazilian business community, bit there are doubts as to if these measures will be sufficient to reverse the declining consumer confidence and increasing unemployment rates.
“Our investments are present, the productive capacity is present,” Luis Moan, president of the National Automakers Association was quoted as saying by Agencia Brasil. “What we need is to once again generate consumer confidence. What halts the domestic market today is the fear of losing one’s job.”

  Crackdown
The economic implosion and corruption scandal that crippled Brazil’s job market have been a boon for one industry: lawyers, Bloomberg reported.
Top law firms that once made the bulk of their income on mergers and share sales are now focusing more resources on debt restructuring and compliance. Demand is booming for so-called forensics teams–squads of crack legal investigators who carry out extensive audits to certify companies are following corporate governance standards.
It’s a silver-lining side effect of the worst economic slump in a century and a spreading graft investigation known as Carwash that has led to over 100 arrests and prompted foreign investors to flee.
That’s all but shut down the market for stock and bond sales, hurting job prospects for bankers and brokers (Deutsche Bank AG, for example, is planning to cut about half its local staff, people familiar with the matter said Wednesday). The jobless rate in Brazil’s six biggest metropolitan areas reached a six-year high of 7.9% in October, then retreated to 6.9% by December.

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