Documente Academic
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Documente Cultură
April 2014
(*) Deputy-Governor, International Affairs and Financial Regulation, Banco Central do Brasil.
personal and do not necessarily reflect the opinions of the Banco Central do Brasil (BCB)
Outline
Global Economy EMEs Brazil
Fundamentals, Differentiation, Policy Reaction Inflation Growth Challenges
Different Studies for Nairu, Phillips Curve and STLT Unemployment & Inflation wages in the US
Source: Krueger, Alan B. Cramer, Judd, and Cho. Are the Long-Term Unemployed on the Margins of the Labor Market?, Brookings Panel on Economic Activity, March 2021, 2014, Princeton University & NBER 7
US-Nairu
Source: Krueger, Alan B. Cramer, Judd, and Cho. Are the Long-Term Unemployed on the Margins of the Labor Market?, Brookings Panel on Economic Activity, March 2021, 2014, Princeton University & NBER
4
2 0
mar-10
mar-00
mar-02
mar-04
mar-06
mar-08
mar-12
10
Source: US Bureau of Census for the Bureau of Labor Statistics - Current Population Survey (CPS)
mar-14
nov-00
nov-02
nov-04
nov-06
nov-08
nov-10
nov-12
jul-01
jul-03
jul-05
jul-07
jul-09
jul-11
jul-13
11
Source: IMF, Monetary Policy In the New Normal, SDN April 2014
12
13
14
95
90 85 80 75 70 mar 00 set 00 mar 01 set 01 mar 02 set 02 mar 03 set 03 mar 04 set 04 mar 05 set 05 mar 06 set 06 mar 07 set 07 mar 08 set 08 mar 09 set 09 mar 10 set 10 mar 11 set 11 mar 12 set 12 mar 13 set 13 Less than a high school diploma Some college or associate degree High school graduates, no college* Bachelor's degree or higher
15
Source: US Bureau of Census for the Bureau of Labor Statistics - Current Population Survey (CPS)
1,5%
1,0% 0,5%
Jan 12 Feb 12 Mar 12 Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14
0,0%
PCE
PCE - Core
Thin line: unemployment rate; bold line: tv-Nairu; dotted lines: 95%-confidence interval; dashed line: unemployment gap.
Source: la Serve, M.E.; Lemoine, M. 2011. Measuring the Nairu: a complementary approach. Document de Travail 342. Banque de France.
17
Source: The Neutral Interest Rate and the Stance of Monetary Policy in Brazil. Anpec 2013
18
Source: THE EFFECTIVENESS OF MONETARY POLICY SINCE THE ONSET OF THE FINANCIAL CRISIS ECONOMICS DEPARTMENT WORKING PAPER No. 1081. OECD
19
Sources: IMF, International Financial Statistics and World Economic Outlook; Bloomberg; CEIC; Consensus Economics; Datastream; national data; BIS calculations.
23
Brazil: Fundamentals
Floating ERR, repricing of assets and depreciation is part of the solution and is not vulnerability Financial Sector has proven resilience, strong capital, provision and liquidity indicators Ratios of external financing (stocks and flows) are strong & sustainable Hedge program is contributing to reduce volatility, including after perfect storm events (e.g., tapering, EME January sell-off, Brazils downgrading)
24
External Financing
External Debt/GDP
Turkey Turkey
Chile
South Africa Peru Mexico Brazil Indonesia Colombia
Indonesia
India Mexico Chile
South Africa
Peru Colombia Brazil 0 10 20 % 30 40 50 0 10 % 20
25
2013* 2012
India
30
100
80 63,4% 60 40 38,8% 19,9% 27,8% 13,9%
%
20
0
short term debt/intl. debt external debt/GDP reserves services/exports Dec 03 Feb 14* *estimate
Source: BCB
17,1
16,4 16,1 15,7 14,8 14,7 14,4 14,4 14,3 14,0 13,9 13,4
Turkey
South Korea Canada Russia
-6,0
-10,9 -13,6 -13,6
Russia
United States Turkey Japan Mexico Australia Canada United Kingdom South Africa India
India
United States United Kingdom Australia Japan South Africa Spain Italy -86,3
-14,5
-14,7 -19,2 -22,2 -31,9
Russia
India Spain Australia 10
13,3
12,0 11,6 12 14 16 18 20
-120
-20
80
80%
95,6 88,7 91,2 85,6
60%
public-owned private-owned foreign-controlled total
Feb 14
Domestic
Source: BCB
External
17,5
15,0
12,5
10,0
7,5
jun 13
jul 13
nov 13
dez 13
jan 13
Source: Bloomberg
jan 14
1000
2000 3000
Swap
Repo FX
USD.BRL 30
NEER (chg %) *
0
-5 -10 Since 2 Weeks May 22,2013 2014
10 8 6 4 2 0 -2 -4 -6 -8
USD/Currency (chg %) *
2014
31
10 5 0
Equity (chg %)
-5 -10
-15 Since May 22,2013 2 Weeks 2014
32
500
IOF on equities at 2%
IOF on equities at 0%
300
200
100
-100
-200
Equities
Bonds
Other Flows
33
fev 06
fev 03
fev 04
fev 05
fev 07
fev 08
fev 09
fev 10
fev 11
fev 12
fev 13
ago 07
ago 02
ago 03
ago 04
ago 05
ago 06
ago 08
ago 09
ago 10
ago 11
ago 12
ago 13
fev 14
% annual
abr 06
abr 12
abr 02
abr 03
abr 04
abr 05
abr 07
abr 08
abr 09
abr 10
abr 11
abr 13
360-day market rate discounted by the IPCA expected for the next 12 months (Focus)
abr 14
Source: The Neutral Interest Rate and the Stance of Monetary Policy in Brazil. Anpec 2013
38
Source: Nicolas E. Magud and Evridiki Tsounta. To Cut or Not to Cut? That is the (Central Banks) Question. IMF Working Paper. October 2012
39
8.24%
IPP Feb 14
8.05%
IPA-DI Mar 14
8 % in 12 months
6.25%
IPA-10 Nov 11
3.22%
jul 12 mar 12 mar 13 jul 13 mar 14
IPP Nov 11
0 nov 11
mai 12 nov 12 mai 13 nov 13 jan 12 set 12 jan 13 set 13 jan 14
IPP
Sources: IBGE / FGV
6,5
% in 12 months 6,0 5,5 5,0 4,5 4,0 3,5 out 12 ago 12 ago 13 abr 12 abr 13 out 13 dez 12 dez 13
IPC-DI = 6.09%
Mar 14
INPC = 5.62%
Mar 14
IPC-Fipe = 5.12%
1st/Apr 14
INPC
IPC-Fipe
abr 14
fev 12
jun 12
fev 13
jun 13
fev 14
May/2003 27,0
18
15 12 9 6 3 0 -3 jan 01 jan 02 jan 03 jan 04 jan 05 jan 06 jan 07
Abr/2013 14,0
jan 08
jan 09
jan 10
jan 11
jan 12
jan 13
IPCA
Source: IBGE
jan 14
Change in Expected Annual IPCA anual after a Surprise in Monthly 5,0 IPCA 4,0 3,0 2,0
y = 1,7299x + 0,0106 R = 0,79
1,0
0,0 -1,0 -2,0 -3,0 -1 -1 m-1
y = 3,0765x + 0,0661 R = 0,50 y = 1,527x - 0,0011 R = 0,81
m-2
Source: BCB/DEPEC.
44
% yoy
4 2
target (4.5%)
0 mar 05 mar 06 mar 07 mar 08 mar 09 mar 10 mar 11 mar 12 mar 13 mar 14 mar 15 mar 16
South Africa Argentina Austr alia Chile China Colo mbia Ec uador Indon esia Japan Malaysia Me xico Peru Thailand Tur key Uruguay
Lag (quarter s)
3,5
1 1 1
1 4 p 4 1 1 1 1
46
Sources: MOURA, GUILHERME and SERGIO DA SILVA, (2005) "Is There a Brazilian JCurve?", Economics Bulletin, Vol. 6, No. 10 pp. 117, July 2005.
HSING, Y. A Study of the J-Curve for Seven Selected Latin American Countries, Global Economy Journal, 2008, 8(4). KALYONCU, H., OZTURK, I., ARTAN, S., KALYONCU, K. Devaluation and trade balance in Latin American countries, Zb. rad. Ekon. fak. Rij., 2009, vol. 27, sv.1, 115-128. ONAFOWORA, OLUGBENGA, (2003) "Exchange rate and trade balance in east asia: is there a Jcurve?." Economics Bulletin, Vol. 5, No. 18 pp. 113, 2003. BAHMANI-OSKOOEE, M. and GOSWAMI, G. G. A Disaggregated Approach to Test the J-Curve Phenomenon: Japan versus Her Major Trading Partners Journal of Economics and Finance, Volume 27, Number 1, Spring 2003. AHMAD, J. AND YANG, J. Estimation of the J-Curve In China, East-West Center Working Papers, Economic Series, n 67, March 2004. HALICIOGLU, F. The Bilateral J-curve: Turkey versus her 13 Trading Partners, Munich Personal RePEc Archive Paper No. 3564, 15. June 2007. BAHMANI-OSKOOEE, M., GOSWAMI, G. G. and TALUKDAR, B. K. The Bilateral J-Curve: Australia Versus her 23 Trading Partners, Australian Economic Papers, Blackwell Publishing Ltd/University of Adelaide and Flinders University, June 2005 and Moodley, S. An estimation of the J-Curve effect between South Africa and the BRIC countries, University of Pretoria, nov. 2010.
115
Index Dec 07 = 100 110 105 100
97.9
110.2 106.3
95
90 4Q 07 1Q 08 2Q 08 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 1Q 12 2Q 12 3Q 12 4Q 12 1Q 13 2Q 13 3Q 13 4Q 13
Poland Brazil South Korea Mexico US Euro Area
Source: Bloomberg
2011
226,9 US China Hong Kong Brazil UK France
2012
146,7 119,7 72,5 65,3 62,5 58,9 54,4 48,5 47,2 44,1 39,6 27,3
Brazil
Germany Russia Ireland Spain Australia Switzerland France Saudi Arabia 0
Singapore
Russia UK Canada France Germany Italy India Spain 0
Singapore
Australia Canada Russia Ireland India Chile Luxembourg Belgium 0
32,5
30,6 29,2 50 100 150 200 Thousands
34,3
31,6 29,5 50 100 150 200 Thousands
26,4
22,6 19,3 50 100 150 Thousands
Source: UNCTAD
China US Germany
17% 12% 10% 7% 7% 7% 7% 5% 30%
33%
Brazil UK
% India Russia Indonesia Japan Mexico
10
15
20
25
30
35
49
50
Concerning investments, it is noteworthy the ample concessions program, which includes the transfer of airport, road, railroad and port management to private sector.
51
Agribusiness record harvest year after year, besides bad weather in 2014.
52
53
Thank You!
54