Brazil didn’t fix inflation and now it’s paying the price
High inflation, poor investment in education, healthcare and corruption leads to massive protests
Brazil didn’t fix inflation and now it’s paying the price
- IOF TAX cut from 6% to 0%
- Inflation hitting the ceiling of central bank’s 6.5%
- US$ hits R$ 2.166
- Lacklust GDP growth by just 0.6% in the first quarter
- Third round of dollar-selling intervention by the Brazilian central bank
Brazil cuts its IOF tax, a federal tax on financial operations that levied 6% on fixed-income investments
Finance Minister Guido Mantega announced late Tuesday that Brazil was reducing the IOF financial transactions tax on fixed-income investments to 0% from 6%, removing a barrier implemented to stem so-called “hot money” inflows. The U.S. dollar has rallied in recent weeks amid talk that the Federal Reserve would curtail its asset-buying program known as “quantitative easing.” The changing global scenario now makes the tax unnecessary, Mr. Mantega said.
“This is a long-term measure–it’s not for an immediate effect,” Mr. Mantega said, speaking to reporters outside the ministry. “We want to leave investors free to invest in fixed-income and Brazilian government securities.”
Selic raised to 8%
Brazil’s central bank over the past two months as part of its effort to fight inflation raised the country’s base Selic interest rate by three-quarters of a percentage point to 8.0%.
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Richard Meijer
What I am doing: Besides running a privately hold real estate business I am blogging om MasterclassBrazil.com. MasterClass Brazil was set up to provide a one-stop source of deep-knowledge for the growing foreign business community in Brazil.
Why: Having been in Brazil for around 20 years, I have seen many big companies, expats and individuals failing miserably. I have burned myself once in Brazil, setting up ProgressOil, a company focused on the supply of Brazilian castor oil. I am now running a privately hold real estate business in Brazil.
From all these experiences I have learned a lot. Despite the fact that I speak the language reasonable well, have a strong network and understand the do's and don'ts better, I am absolutely not saying I am an expert or specialist. Everyday I am learning new things and I believe Brazil is changing in such a rapid pace that the only way to survive in Brazil is to generously absorb and understand the information available to you.
From my experience I have learned that there is a lot of information, facts and data about Brazil. I have set up MasterClassBrazil to structure this information so you can turn it in true knowledge, enabling you to be successful in your endeavors.
There is nothing in the world so rewarding as sharing expertise and knowledge.
Richard Meijer
