Brazil's central bank halted one of the world's boldest rate-hiking cycles on Wednesday, taking pressure off an economy struggling with recession even amid concerns that a looming budget crisis could stoke inflation.
Brazil's industrial production plummeted in July and fell well below economists' worst predictions. Industry output sank 1.5% in July from June in seasonally adjusted terms and was down 8.9% from a year earlier, the Brazilian Institute of Geography and Statistics, or IBGE, said Wednesday. The IBGE also revised June's drop to 0.9% from 0.3% from the previous month.
President Dilma Rousseff vowed on Wednesday to take new measures to reduce the deficit her administration is projecting for 2016, without ruling out more spending cuts and additional taxes in Brazil. The 2016 budget unveiled on Monday projected Brazil’s first-ever primary fiscal deficit, before payment of interest on the national debt, sparking controversy.
President Michel Temer asked business owners and executives for a “national alliance” to deal with Brazil's political crisis and shaky economic situation. Temer is leader of the centrist PMDB, the main governing partner of Rousseff's center-left Workers Party, PT.
Brazil's largest oil workers' union advised Petrobras that it plans to begin an open-ended strike against the state-run oil company starting at midnight (0300 GMT) on Friday. The strike is in protest at a recent cut of about 40% in investments by Petrobras and the planned sale of about $15.1 billion of assets, the union, known as FUP, said in a statement on Tuesday.
Brazil's Petrobras announced late Monday that it would raise the wholesale price of liquefied petroleum gas (LPG) by 15% effective Tuesday, the first price adjustment for the essential cooking gas in 13 years. The move is part of efforts by Petrobras to reduce losses on fuel sales, a company Petrobras source said.
Analysts expect Brazil's economy to contract by 2.26% this year, reflecting greater pessimism in the wake of the release of figures last week showing that the country is in a recession, the Central Bank said Monday.
Credit rating firm Moody’s cut its 2016 global economic growth forecasts, with China and United States both trimmed and Russia and Brazil seen staying in recession.
Brazil's government presented a 2016 budget Monday that for the first time projects the world's seventh largest economy operating in the red, sparking worries that the country's investment grade rating will be put at risk.
Britain's Rolls-Royce is cooperating with investigators in a massive corruption scandal at Brazilian state oil giant Petrobras, a spokesman said. The engineering company confirmed it had been contacted by investigators involved in the probe, which has engulfed Brazil's political and business establishment amid allegations of a massive kickbacks scheme.