South American music and culture magazine

Brazil’s central bank is desperately trying to grasp the reins of inflation. The central bank’s chief, Alexandre Tombini, will certainly hope that inflation continues on its current course and falls within the central bank’s target by the end of 2011. If inflation is above the Bank’s target (4.5%) by more than two percentage points in December, by law, he will have to swallow his pride and write an open letter explaining himself to the finance minister. Continue Reading

Earlier this week Brazil’s Finance Minister, Guido Matega, beamed with exuberance as he reported that the economy had become the fifth largest in the world, overtaking both the UK and France. Brazil’s output grew by 7.5 per cent in 2010, driven by the growth of exports, foreign investment, consumer demand and government spending – its fastest rate since 1986. In terms of growth, Brazil’s economy is now the third fastest expanding economy in the world. Gross Domestic Product (GDP) had reached $2,215 billion in 2010. Continue Reading

Brazil has made significant strides toward economic prosperity over the last two decades. Economic progress has been built on the strong foundations of Luiz Inácio Lula da Silva and his predecessor, Fernando Henrique Cardoso, managing to forge strong relationships with major global trading partners and building a reputation for macroeconomic stability. A combination of sound economic policy, currency stability and sustained growth in commodity exports has brought about rising levels of employment, wage growth and more recently, an increase in the availability of consumer credit. Continue Reading

The last thing the global economic recovery needs right now is instability. But this is precisely what central government manipulation of currencies is likely to lead to. According to Brazil’s finance minister, Guido Mantega, the world is in the midst of an “international currency war” as some governments have forced down the value of their currencies in order to remain competitive. A currency war could result in high volatility in the foreign exchange market or retaliatory protectionism, as countries try to boost exports at the expense of others, putting international trade at risk and destabilising the recovery. Continue Reading

The emergence of the Greek sovereign debt crisis in recent months serves as a powerful reminder of how far Argentina has come this decade. Argentina defaulted on sovereign debt (bonds issued by the Government) in 2002, which was followed by a period of intense economic, political and social turmoil. Argentina’s government debt was the largest default in international finance history at $132 billion US dollars. Its central bank currency was nearly wiped out during the crisis.
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