By Patricia Maresch, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – The Federation of Industries in São Paulo (Fiesp) predicts a loss of R$26.8 billion (US$16.7), or 10 percent, in new foreign investments in Brazil as the global economy faces new threats from the U.S. and European debt crises. Local factories are struggling with an overvalued Brazilian currency, imports from China and economic difficulties abroad.

Finance Minister Mantega, photo by José Cruz/ABr
Finance Minister Guida Mantega, photo by José Cruz/ABr.

The lower expectations reflect the reduction in exports and decline in domestic sales, says a Fiesp-spokesperson. Sectors that are most affected are the food industry, chemical industry and manufacturers of leather and footwear.

Earlier this month Finance Minister Guida Mantega said manufacturers are also struggling to compete internationally because larger economies, including the U.S., are “artificially” weakening their currencies in order to make their own exports cheaper.

Read more (in Portuguese).

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2 COMMENTS

  1. What mantega is saying about the dollar and other currencies being artificially devalued, has been said by Dilma Roussef when she had meetings with China officials, but we all know that this is pure nonsense! The reality is that the REAl is not a real valued currency; in other words, it is the most artificially valued currency in the world! For example, why was is it that the BANK of BRAZIL in LONDON limited the amount you can pay into an account with them to R$ 500 reais per day, yet there was no limit on most hard currencies like the GBP or US dollar, Yen, Euro etc…?
    Can we you see the US Federal Reserve Bank or ANY American bank refusing dollars? EVEN the Duty free shop in Rio international airport did not accept Reais until recently! So who is artificially devalued or over valued?

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