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Brazzil - Politics - August 2004

Brazil: Lula's Popularity Rebounds Slightly

A new survey in Brazil found that 45 percent of Brazilians
believe that the economy is improving their quality of life. As
for income, 15.9 percent said their income had increased over
the last six months, while 31.4 percent said their income fell.
And 66 percent don't think this is a good time to go shopping.

Keite Camacho


Picture Brazil's latest CNT/Sensus poll, sponsored by the Confederation of Transportation (CNT), shows that the popularity of the Lula government has risen. The percentage of those interviewed who see the administration as doing a good job was 38.2 percent, compared to 29.4 percent in June.

According to the CNT president, Clesio Andrade, the rise is probably due to the economy where jobs are being created and there has been a small upsurge in growth.

The survey found that 45 percent of those interviewed said the economy was having a positive effect on their quality of life. But, 65 percent said economic performance during the last two months had not affected them (some numbers overlap).

Asked about their income, 15.9 percent said their income had increased over the last six months; while 31.4 percent said their income fell over the last six months. With respect to the next six months, 37.9 percent said they expected their income to rise; 15 percent said their income would probably decrease.

The survey found that more Brazilians were planning to go shopping: 13.7 percent now say this is a good time to make purchases, while 66 percent say it is not.

The survey asked about the Olympic games and Brazil's athletes. A big majority, over 70 percent, said they think the country will do better in Athens than ever before.

Almost 59 percent of those interviewed said the government was investing well in sports and 81 percent said the results of the Olympic games did have an influence on their self-esteem.

The CNT/Sensus survey took place between August 3 and 5. It interviewed 2,000 people in 195 locations around the country. The survey margin of error is 3 percentage points.

Trade Surplus

The Brazilian trade balance the first week of this month (1-8) showed a US$ 937 million surplus, the largest ever recorded in the first week of August. Exports amounted to US$ 2.106 billion, while imports totaled US$ 1.169 billion.

Over five business days, average daily exports came to US$ 421.2 million, while imports averaged US$ 233.8 million. Compared with the daily averages for August, 2003, sales abroad rose 38.1 percent, due to increased sales in all product categories.

Average daily sales of basic goods were up 55.6 percent in relation to August, 2003, jumping from US$ 91.9 million to US$ 142.9 million. The chief products sold to foreign buyers were iron ore, chicken, beef, pork, crude oil, soybean meal, and coffee.

Sales of semimanufactured items rose 33.2 percent, from a daily average of US$ 48.3 million to US$ 64.4 million. The major items in this category were forged iron, sugar, leather, and hides.

Exports of manufactured goods also grew, 30.9 percent. The daily average increased from US$ 159.6 million in 2003 to US$ 208.8 million. The chief items shipped abroad were airplanes, automobiles, motors for vehicles, and autoparts.

In the import column, the daily average rose 31.6 percent, compared with the first week of August, 2003, from US$ 177.7 million to US$ 233.8 million. Most of the additional expense came from purchases of fertilizers (154.6 percent), rubber products (53.9 percent), plastics (50.2 percent), and electrical and electronic equipment (47.9 percent), among other items.

Overall for the year so far, exports total US$ 54.404 billion, 37.7 percent more than during the same period last year. Imports come to US$ 34.938 billion, up 30.4 percent in comparison with 2003.

The cumulative trade surplus up to now is US$ 19.466 billion, as against US$ 12.730 billion for the same period in 2003, according to information provided by the Ministry of Planning.

Agribusiness Surplus

Agribusiness registered a US$ 3.36 billion trade surplus in July. This was the second best result for the month of July since 1989, when the statistical series began.

The most impressive results occurred in the soybean complex (grains, oil, and meal), meats, coffee, sugar, alcohol, wood, dairy products, and cotton.

According to the Minister of Agriculture, Roberto Rodrigues, the surplus in the sector may surpass US$ 30 billion by the end of the year.

Brazil exported US$ 3.75 billion worth of agricultural products in July, 44.5 percent more than in July, 2003. Agribusiness was consequently responsible for 42.5 percent of Brazil's exports in July.

Over the past 12 months (August, 2003, to July, 2004), the sector's exports attained US$ 36.67 billion, and the surplus was US$ 31.8 billion.

Soybean exports amounted to US$ 1.12 billion in July, an increase of 56 percent in relation to July, 2003. This result corresponds to a little over a third of agribusiness exports during the period.

Tax Reductions

President Luiz Inácio Lula da Silva, declared during his fortnightly radio broadcast, Breakfast with the President, that the measures announced last Friday will help the business community to make investments, buy equipment and hire more workers. "Produce more, earn more, generate more jobs and more riches," was the way Lula summed it up.

Last Friday the Brazilian government announced a special tax regime to stimulate investments in ports, a reduction of taxes on manufactured goods (IPI) for industrial uses, modifications in income taxes on investments, tax exemptions for the real estate sector, and a reduction in taxes (IOF) on life insurance.

President Lula revealed that the measures were implanted in response to calls from the productive sector. The objective, he said, was to make investing easier while creating jobs.

On another economic front, the retail price index (IPV) for the greater São Paulo region rose 0.9 percent in the first sample period of this month, as reported by the state Commercial Federation (Fecomercio-SP).

For the sake of comparison, in July the IPV rose 0.86 percent, in June it was up 1.55 percent and in May 1.19 percent. Those increases are blamed on a spike in demand for warmer clothing due to a colder, more prolonged winter weather this year in Brazil and Mother's Day in May.

And the fall in August is seen as due to the end of those pressures. For example, in the latest sample period, clothing prices actually fell 1.32 percent. However, there was a sharp rise in prices of footwear, up 3.29 percent. Prices for durable goods rose 1.58 percent, and food prices were up 1.42 percent.

Keite Camacho works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.
Translated from the Portuguese by Allen Bennett.

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