‘The lost decade is over’ in Brazil, proclaims ‘the bald man’ – 01/17/2023 – Nelson de Sá

From Robin Brooks, influential chief economist at the Washington-based Institute for International Finance (IIF), an association of major private financial institutions, known as “the bald guy” in Faria Lima:

“Very excited about Latin America and especially Brazil this year. The lost decade is over. Higher commodity prices and geopolitics are shifting capital flows in favor of Latin America.”

“The markets agree”, he adds, citing the performance of the currencies of Brazil and Mexico, at the top of the year so far. Analysis of it:

“There are three themes driving emerging markets in 2023: falling US inflation; ending Covid zero in China; rising commodity prices. All three favor Latin America the most, given its status as a major commodity exporter.”

Brooks’ proclamation appears to clash with US headlines on Tuesday, with the Wall Street Journal noting that Chinese growth has fallen to “almost historic” levels and the New York Times hailing the “stumble” that brings “fear” to the Chinese economy. .

Chinese in English, such as Global Times and China Daily, already counter that, “despite the slight slowdown in the fourth quarter due to an increase in infections [de Covid]China still outperformed most other major economies last year, including the US”.

Echoing “the bald guy”, Bloomberg, which pays little attention to the news of 3% Chinese growth, points out that “China awakens hope for global growth in 2023”, amidst forecasts of recession in the US and Europe.

It says that “the reopening of China is quickly becoming the most important issue in emerging countries”, for “global investors”. And that “projections show that the second largest economy could grow 4.8% in 2023, compared with an expansion of 0.4% in the US and 0.1% in the European Union”.

FROM XI TO LULA

For Brazil, since Lula’s election, Beijing has been offering a “welcome”, in the expression used by the chancellery spokesman when asked about the new president’s visit at the beginning of his term, as reported by Huanqiu (Global Times in Chinese) and Guancha.

The welcome is mainly commercial. China released and, news of this beginning in the Xinhua news agency, by Diário do Povo and others, “it imports Brazilian corn in a bulk carrier for the first time” (image at the top).

It also released a series of Brazilian products with more added value, such as the Embraer E190-E2 model, soybean meal and even, a few days ago, transgenic sugarcane.

And the Asian Infrastructure Investment Bank (AIIB), from Beijing, “is going to increase financing for Brazil”, according to the newspaper Valor, with three operations already in preparation for this year, in infrastructure.

The bank was created “as an alternative to multilateral institutions, such as the World Bank, dominated by developed countries”. Its president, Jin Liqun, a former Chinese vice minister of finance, plans to visit Brasilia in April. Its legal director is Brazilian, Alberto Nínio.

PRESENT LINK: Did you like this text? Subscriber can release five free hits of any link per day. Just click the blue F below.