The Economic Consequences of the Real. Economic Department

Transcription

1 The Economic Consequences of the Real Economic Department

2 I/2002 III/2008 IV/2008 IV/2009 I/2010 IV/2013 I/2014 II/2016 The great recession: A Four Act Drama. GDP (YoY accumulated) Source: IBGE 8,00% 6,00% 4,00% 2,00% 0,00% -2,00% I III I III I III I III I III I III I III I III I III I III I III I III I III I III I III I III I III I III I ,00% -6,00% 2

3 The Ortodox View A portrait of the conscience.

4 The Ortodox View. Two main hipotesis: 1. Brazil growth during 2002 and 2008 was due an external commodity shock. 2. The main brazilian problem is increasing government spending that delivered fiscal imbalance. 4

5 The Ortodox View: commodity boom and gloom. Commodity & Oil / /2008 CRB = 184% Oil = 525,4% Source: Bloomberg $160,00 $140,00 $120,00 $100, $80, $60,00 $40,00 $20,00 0 $- CRB (USD) Oil (First active Contract) 5

6 The Ortodox View: commodity boom and gloom. 6

7 The Ortodox View: commodity boom and gloom. 7

8 The Ortodox View: commodity boom and gloom. Components contribution to GDP - Brazil (estimated) Source: IBGE, Gradual Investimentos Households Government Spending Gross Investment Exports Imports -20,00% -10,00% 0,00% 10,00% 20,00% 30,00% 40,00% 50,00% 8

9 The Ortodox View: commodity boom and gloom. 9

10 I/2002 III/2008 The Ortodox View: commodity boom and gloom. 10

11 The Ortodox View: spending fast? 11

12 The Ortodox View: spending fast? 12

13 The Ortodox View: spending fast? 13

14 The Ortodox View: spending fast? 14

15 The Economic Consequences of the Real Unconsciouness speaks.

16 The Economic Consequences of the Real. Two simple equations... Marginal Efficiency of Capital (mec) Zero Cupon Bond Yield (yield) mec = Qn (1 r) n Yield = F PV 1/n 1 Where: Q = prospective return r = risk free interest rate n = number of periods Where: F = Face Value PV = Present Value n = number of periods 16

17 The Economic Consequences of the Real. Real Interest Rate (ex-post) (YoY) Source: Bloomberg, Gradual Investimentos * as oct/ * Brazil 12,31 10,11 6,79 7,85 4,44 4,84 4,5 1,41 4,09 5,34 3,58 6,13 Chile 0,84 2,69-1,83 1,16 1,88 0,28 0,81 3,51 1,56-1,6-0,65 0,7 Mexico 4,92 2,95 3,74 1,78 0,93 0,1 0,68 0,96-0,47-1,08 0,52 1,69 Colombia 1,15 3,02 3,81 1,83 1,5-0,17 1,02 1,81 1,31 0,84-0,89 1,27 Indonesia -4,37 3,15 1,41-1,81 3,72-0,46 2,21 1,45-0,58-0,61 2,61 3,19 China 3,98 3,32 0,97 4,11 3,41 1,21 2,46 3,5 3,5 4,1 3,05 2,25 17

18 The Economic Consequences of the Real. 18

19 The Economic Consequences of the Real. 19

20 jul/40 ago/42 set/44 out/46 nov/48 dez/50 jan/53 fev/55 mar/57 abr/59 mai/61 jun/63 jul/65 ago/67 set/69 out/71 nov/73 dez/75 jan/78 fev/80 mar/82 abr/84 mai/86 jun/88 jul/90 ago/92 set/94 out/96 nov/98 dez/00 jan/03 fev/05 mar/07 abr/09 mai/11 jun/13 jul/15 The Economic Consequences of the Real. Real minimum wage (in BRL) Source: IPEA Data, Gradual Investimentos R$ 1.600,00 R$ 1.400,00 R$ 1.200,00 Vargas suicide Military coup 1964 R$ 1.000,00 Dilma Impeachment R$ 800,00 R$ 600,00 R$ 400,00 Plano Real R$ 200,00 R$ - 20

21 The Economic Consequences of the Real. Currencies (index 100 = 01/2004) Source: Bloomberg, Gradual Investimentos jan-04 jan-05 jan-06 jan-07 jan-08 jan-09 jan-10 jan-11 jan-12 jan-13 jan-14 jan-15 jan-16 JPY EUR MXN CHF SEK BRL 21

22 jul/40 jul/42 jul/44 jul/46 jul/48 jul/50 jul/52 jul/54 jul/56 jul/58 jul/60 jul/62 jul/64 jul/66 jul/68 jul/70 jul/72 jul/74 jul/76 jul/78 jul/80 jul/82 jul/84 jul/86 jul/88 jul/90 jul/92 jul/94 jul/96 jul/98 jul/00 jul/02 jul/04 jul/06 jul/08 jul/10 jul/12 jul/14 The Economic Consequences of the Real. Minimun wage purchasing power parity (USD) Source: IPEA Data, Gradual Investimentos $450,00 $400,00 $350,00 $300,00 $250,00 $200,00 $150,00 $100,00 $50,00 $- 22

23 The Economic Consequences of the Real. 23

24 The Economic Consequences of the Real. TAX RELIEF IN 2015 = BRL 400 BILLION 24

25 The Economic Consequences of the Real. Domestic Workers as percentage of Household Expenditure Survey 4% Source: IBGE, BLS, Eurostats, INE (Chile), CSO (Ireland) 3% 3% 3% 2,30% According to the ILO's 2013 report, Brazil has around 7.2 million domestic employees or 13% of the total. Brazil is the country with the largest number of domestic employees in absolute terms. 2% 2% 1,40% 1,10% 1% 0,90% 0,80% 0,70% 1% 0,50% 0,50% 0,30% 0,30% 0,25% 0,20% 0% 0% 0% 25

26 The Economic Consequences of the Real. Investment Fund Industry Net Worth (constant price) (BRL million) Source: ANBIMA R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ Fixed Income Stocks Multi-Asset Currency Pension ETF FIDC Private Equity (FIP) Real State (FII) OFF-SHORE 26

27 The Economic Consequences of the Real. Private Equity (FIP) net worth (BRL million) Source: ANBIMA R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 620% increase R$ ,00 R$80.000,00 R$60.000,00 R$40.000,00 R$20.000,00 R$

28 The Economic Consequences of the Real. Investment Fund Industry Net Worth (constant price) (BRL million) in 2015 Source: ANBIMA R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$ ,00 R$- Fixed Income Multi-Asset Pension Private Equity (FIP) Stocks FIDC Real State (FII) OFF-SHORE Currency ETF 28

29 The Economic Consequences of the Real. The schedule of the marginal efficiency of capital is of fundamental importance because it is mainly through this factor (much more than through the rate of interest) that the expectation of the future influences the present. The mistake of regarding the marginal efficiency of capital primarily in terms of the current yield of capital equipment, which would be correct only in the static state where there is no changing future to influence the present, has had the result of breaking the theoretical link between to-day and to-morrow. Even the rate of interest is, virtually, a current phenomenon; and if we reduce the marginal efficiency of capital to the same status, we cut ourselves off from taking any direct account of the influence of the future in our analysis of the existing equilibrium. Chapter 11, The Marginal Efficiency of Capital. John Maynard Keynes General Theory of Employment, Interest and Money 29

30 The Economic Consequences of the Real Fiscal situation and forecast.

31 The Economic Consequences of the Real. 31

32 The Economic Consequences of the Real. 32

33 The Economic Consequences of the Real. 33

34 The Economic Consequences of the Real Monetary war: is the world less safe?

35 The Economic Consequences of the Real. 35

36 The Economic Consequences of the Real. 36

37 The Economic Consequences of the Real. 37

38 Contatos Departamento Econômico André Perfeito, economista-chefe Camila de Caso Ouvidoria/SAC:

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