South America

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Brazil's federal government posted a bigger-than-expected primary budget deficit in May as net revenue fell during the period, official figures showed on Wednesday, Reuters reported. According to the Treasury, the budget deficit reached 39.4 billion reais ($7.55 billion) last month, worse than the median forecast of a 30.3 billion reais deficit in a Reuters poll. Net revenue fell 3.3% in real terms over May of last year, as transfers to states and municipalities surged 35.4% on the same basis.
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Colombia's fiscal rule committee said on Tuesday the country's finances are still not in order despite upticks in predicted tax revenue, and there is risk of an eventual increase in debt and spending, Reuters reported. The expert Autonomous Fiscal Rule Committee (CARF), charged with evaluating public finances, added in a statement there should be a change in the country's accounting to include fuel subsidy deficit.
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Brazil created a net 277,018 formal jobs in May, Labor Ministry figures showed on Tuesday, above market expectations, but workers' pay has declined, Reuters reported. According to the ministry, the average monthly salary of new jobs created in May decreased 0.94% from April to 1,898 reais ($363.59), after having posted a gain in the previous month. Job openings happened across the board, led by the service sector, which alone created 120,294 new jobs, recovering from the blow suffered from the coronavirus pandemic.
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Brazil's central bank is aiming for inflation in 2023 "around" the 3.25% target but less than 4%, its chief, Roberto Campos Neto, said on Thursday, as policymakers hike interest rates to cool surging consumer prices in Latin America's largest economy, Reuters reported. When it raised its key interest rate to 13.25% last week and penciled in another hike for August, the central bank said it was looking to ensure inflation next year converged "around the target" rather than "to its target." "Around is less than 4%, just to make that very clear," Campos Neto said in an online news conference.
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Brazil's antitrust watchdog on Wednesday approved the sale of state-run oil firm Petrobras' 51% stake in gas company Gaspetro with no restrictions, Reuters reported. Petrobras is selling the stake to Compass, which is controlled by energy company Cosan, for 2.03 billion reais ($394.15 million), according to a statement from Compass when the deal was announced last July. Japan's Mitsui & Co. owns the remaining 49% stake in Gaspetro, a holding company which controls 18 distributors of piped natural gas. The watchdog's Wednesday decision came on a 4-3 vote.
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Brazil’s central bank said an extension of its aggressive tightening cycle with another interest rate hike in August is needed to assure that high inflation forecasts will fall back around their target, Bloomberg News reported. Policy makers discussed signaling a steady interest rate for a “sufficiently long” period but concluded another hike would still be needed, according to the minutes of their June 14-15 meeting, when the board raised borrowing costs to 13.25%.
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Miners Vale SA and BHP Group said in a joint statement on Monday they are not interested in selling their joint venture Samarco, after reports of the interest of Brazilian steelmaker Companhia Siderurgica Nacional (CSN), Reuters reported. "BHP Brasil and Vale say Samarco is not for sale and reaffirm its support for the restructuring plan filed by the employees' unions," the companies said in a joint statement. The statement added the companies are "focused on the mediation hearing in the bankruptcy process" scheduled for Tuesday.
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Peru's central bank on Friday said it had reduced its growth projection for 2022 to 3.1% from 3.4% previously amid global economic volatility and a recent disruption to mining activity in the Andean nation, Reuters reported. The bank maintained its estimate for 3.2% GDP growth in 2023, bank president Julio Velarde said in a presentation accompanying its latest macroeconomic projections report. It saw a lower fiscal deficit for 2022 of 1.9% of GDP compared to a previous 2.5% projected in March, principally due to higher fiscal revenues, Velarde said.
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Argentina's monthly inflation clocked in at 5.1% in May, still painfully high but below expectations and slower than the two previous months as the South American grains producer battles to bring down consumer prices, Reuters reported. That was below the median forecast of 5.2% that local and foreign analysts polled by Reuters gave. The rate was 6% in April and a year-high 6.7% in March. The annual inflation rate, however, is expected to top 70% by the end of the year.
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