BRAZIL: Economic revival

Consumers and businessmen are trusting again in the Brazilian economy. Economic recovery is coming sooner than many imagined. Some optimistic forecast a growth of 2% in 2017 and 4% one year after. Not bad after a long period of ordeal and uncertainty. Gradually confidence returns. A total of up to $35 Billion dollars are expected to be invested by global funds.

A new cycle is beginning. A great step forward was the impeachment approval of former president Dilma Rousseff. Recentlly, there was also the removal of Eduardo Cunha (former president of the chamber of deputies), who represented a hinderance for the development of urgent measures.

The Market has been reacting with moderate optimism. Bovespa (Sao Paulo stock exchange) this year rose more than 30%. The Real is appreciating noticeably and several economic sectors already look to the future with much more optimism. Even the IMF already sees some progress in the brazilian economy.

This interim government will announce a package of measures and serve as a counterpoint to fiscal adjustment. As soon as the impeachment is validated several pending issues will be triggered.

It is necessary to clarify that most of the main problems still remain. Unemployment is still rising and this trend will continue most likely until the middle of next year. However its growth will be much slower and inflation will have a tendency to fall in the near future. Therefore, consumer's budget will get more relieved. Dangers are always nearby. The ghosts of the past still affect nowadays and surely will influencie the future. But the increase in confidence and good prospects for the future are here to stay.

BRAZIL:Time to invest in Brazil

Nowadays, with an interim government associated with center-right politics, Brazil is following sharper policies.

Some funds and market bonds are bringing good profits to investors. The foreign direct investment is much higher than the rest of South American countries. Future prospects at short-term are optimistic.

But why invest if we have so many bad news coming from Brazil? If the macroeconomics environment is favorable and if economy is at rock bottom, possibly that's the right time to invest. Economic policies encouraged by the interim government seem to have pleased the market whom has corresponded positively. See the recent appreciation of the Real (Brazil`s currency) against the dollar.

Let's not forget Brazil always had severe structural problems. Markets also have periods of contraction and adjustments.

Difficult times can still go on. Nobody knows for how long. Nevertheless, Temer's government has established some assumptions that have been positively interpreted by investors and Brazil continues to attract them.

ANGOLA:Sonangol`s debt woes

"The task facing Angola’s state oil company, Sonangol, as it adjusts to lower revenues during the slump in oil prices, is complicated by a stratospheric debt burden which gives little room for manoeuvre.  And yet the new administration is unexpectedly making repayment of one private debt a top priority.In spite of multiple pressing issues (including the root-and-branch restructuring of Sonangol) repayment of this particular debt has been fast-tracked by Sonangol’s new CEO, the President’s daughter Isabel dos Santos.   A source close to the Sonangol board has told Maka Angola it’s the reason why Sonangol has been seeking a loan of US $800 million from a bank based in Egypt, offering as surety its shares in the Millenium BCP division of Portugal’s largest private bank, the Commercial Bank of Portugal (BCP).  The urgent repayment?  A one billion US dollar debt owed to Trafigura. This is the joint venture between the controversial Swiss multinational Trafigura, trading as the DT Group and Angola’s Cochan company. Trafigura exports Angolan crude, and then imports the refined fuels back into Angola, with a near monopoly on the import of petrol and diesel."

From Rafael Marques de Morais "Sonangol's Billion Dollar Headache" in MakaAngola

BRAZIL: Finally some good news for Temer:

After two months leading the Brazilians, Michel Temer finds the first reasons to cheer up. Notwithstanding much criticism, his popularity slightly increased in the last month.

This government struggles for credibility since day one. Austerity and the political rhetoric of efficiency are the major mottos, at least up to now.

Those arguments have generated a reliable growth in some key areas such as the industrial sector.

Some measures and overall aims are noteworthy. The reduction of nine ministries led to a freezing of comissioned posts. Positive as well, was sending a proposal for a constitutional amendment that limits the increase in public expenditure to inflation of the previous year.

Brazil urgently needs to carry out a fiscal adjustment. Surely some unpopular measures are necessary. Pension reform and the welfare state is directly related with the great turmoil Brazil has in state coffers.

ANGOLA:SONANGOL pays to COBALT and TRAFIGURA?

Inside sources say that with the change of SONANGOL`s administration the resolution of the debt to Trafigura  and the payment of the purchase of Cobalt International operations in Angola, are priorities of Isabel dos Santos, as they are business´linked with palatial presidential interests.

PORTUGAL:Portugal`s risk

Portugal is entering a danger zone. Economic performance is low, public debt increases, the banks are not to be  trusted. 

It is common opinion that even England in turmoil Brexit provides more confidence then the Portuguese economy.

Two factors contribute to this feeling: the anti-Europeanism of parties that support the government, which begins to be felt in the Prime Minister's rhetoric and the poor results of the economy.

An exitof the danger zone can only be obtained with political change and the adoption of policies that comfort the German partners. 

There was a kind of trade-off. Portugal followed a policy and in exchange Germany supported to Portugal in case of  need. This trade-off has been broken.

So the economic issue is primarily political.

BRAZIL:Brazil high taxes

"Most Brazilians are against the high levels of taxes. Constant and disproportionate increase in public expenditure is not the way"

Rather than raising taxes, the Federal Government should cut public expenditure and improve the management of resources. Brazilian population clamours for a good quality of public services a long time ago.

The efficiency of federal and state services are always at stake; unfortunately hardly ever a high standard level is reached. Health and public security remain the most cricticized areas. As for education, still lags far behind of what is expected, particularly in a society that is to be modern and developed.