May, 26th – 2023
1. Government announces measures to boost the automotive industry
After meeting with representatives of the automotive sector, labor unions, and corporations, Vice President and Minister of Industry, Trade and Services Geraldo Alckmin announced measures to reduce vehicle prices and boost the industry.
According to Alckmin, the federal government will offer tax cuts for the manufacturing of cars costing up to R$120,000.
Alckmin also said the measure will last until the benchmark interest rate begins to drop.
2. Oil exploration in the Amazon River base leads to government conflict
Environmental authorities in Brazil have vetoed plans by Petrobras for oil exploration at the base of the Amazon River, leading to conflicts between environmentalists and development advocates in the Lula administration.
Environment Minister Marina Silva opposes the extraction of petroleum in the area, while other government leaders, including Mines and Energy Minister Alexandre Silveira, are in favor of maritime drilling 175 km away from the Brazilian coast.
President Lula has been mediating discussions to avoid further political problems. Petrobras announced to the market that it will ask the government to reconsider the veto.
Folha de S. Paulo: Lula deve arbitrar impasse causado por veto à exploração na foz do Amazonas
3. Chamber of Deputies approves new Brazilian fiscal rules
The Chamber of Deputies took the first step in changing the rules for public spending in Brazil. By a 372 to 108 vote, representatives approved the new fiscal framework that will replace the current legislation, known as the spending cap, that was put in place in 2016 during the Temer administration.
Under the new rules, the government can only increase spending as a percentage of revenue growth, with a penalty if the goals are not met. The rule aims to curb debt levels and encourage lower interest rates while promoting economic growth.
The bill will now be evaluated by the Senate, with discussions planned for next month.
Câmara dos Deputados: Câmara aprova projeto do arcabouço fiscal
4. BNDES offers new lines of credit for the industrial sector
Brazilian Development Bank (BNDES) president Aloízio Mercadante announced new lines of credit to boost the export industry. Mercadante made the announcement during an Industry Day celebration event on May 25 at the headquarters of the Federation of Industries of São Paulo.
According to Mercadante, the bank will offer two lines of credit to exporters. The first will offer R$2 billion to the export industry, with an interest rate of 7.5% for 10 years and a two-year grace period. The second, also offering R$2 billion, will have a 61% spread reduction.
Mercadante said the plan is for the Brazilian industrial sector to have the same financing opportunities as the agriculture sector, making it more competitive and contributing to the country’s industrial development.
Valor Econômico: Presidente do BNDES anuncia novas linhas de crédito para a indústria
5. With a majority of members being government allies, CPMI to investigate January 8 riots begins
Chamber of Deputies representatives and Senators have convened a new committee to investigate the antidemocratic riots on January 8, during which Jair Bolsonaro supporters stormed government buildings in Brasília.
The committee aims for the investigation to assess the responsibility of political leaders, businesspeople, and citizens for crimes including vandalism, damage to public property, and an attempted coup d’état. A majority of the CPMI members are allies of the administration. This means that the subjects of the investigation will be the the opposition, supporters of former president Jair Bolsonaro.
The committee will meet weekly, on Thursdays, and expects to conclude its investigation within 120 days.
Senado Federal: CPMI do 8 de Janeiro é instalada; Eliziane é designada relatora