30 “This complex equation eventually made credit too expensive. ANFIR defended throughout the year the adoption of a new, simpler and cheaper rule which would have minimized the adverse effects of the crisis on the sector,” says Braga. Modest recovery Braga does, however, forecast growth in domestic highway implements in 2017 of around 10% on 2016. He remembers, however, that the comparative base is low and emphasizes that in practice this growth is a modest recovery in the face of the losses suffered by the sector. What might spark this slight improvement, says Braga, is the expected stabilization of the economy, with GDP returning to growth, new infrastructure projects, and a record harvest, among other factors. Antonio Megale, president of the National Association of Automobile Manufacturers (Anfavea), shares Braga’s vision with respect to the recovery of sales at an even slower pace. He forecasts 10% for 2017 and lists some factors for this: lower interest rates, inflation close to the middle target, a record grain harvest, and GDP growing slightly in the year, close to 0.5% - but growing. But for the president of Anfavea a more favorable and sustainable scenario depends on government actions with longer lasting consequences, “Economic growth has to be created not by consumption, but through large investments. Unemployment is high and consumer confidence has not returned to a satisfactory level,” he says. This is why, says the executive, the government must put into practice at least some of what it has promised: “We need major concessions quickly. It would be an opportunity not only for the transport sector and for the whole country, as it involves roads, major works and ports, for example. It’s time these plans were put into practice. Brazil has announced too many plans. It needs to get going,” he says. The urgency Megale calls for is justified. The impact on the economy of these works would require a few months and would be noticed in the course of the second half of the year or more palpably in early 2018.Meanwhile truck manufacturers continue to report average idle capacity of a staggering 80% since 2016. The figures for the first two months of 2017 illustrate the scale of the problem assemblers have faced. Vehicle registrations were fewer than 5.6 million units in the period, the worst result since 1993 and 32.8% down on the first two months of 2016. “Carriers are still using vehicles purchased in the last two years and which have been idle,” explains the president of Anfavea. José Antonio Fernandes Martins, president of the Interstate Railroad and Highway Materials and Equipment Association (Simefre), is moderately upbeat after the recent raising from ‘negative’ to ‘stable’ for Brazil rating by Moody’s, which justified the change by inflation closing in on its target, an improved fiscal and institutional environment and more positive numbers from Petrobras. “There has been an improvement in confidence among businesspeople and this suggests a slight and gradual recovery in the industrial sector and economic activity as a whole,” says Martins, who nonetheless says this recovery has not been seen in the freight and passenger transport industry in the first quarter of 2017. The President of the SIMEFRE also notes that the high cost of borrowing is still an inhibitor. “Finame interest rates, at 9.5% per year, are strongly impacted by the spreads of financial agents, reaching an absurd 5% to 7%, or even more. This results in final rate of up to 17% and there is no cargo rate that can cover such high costs,” he says. A more favorable environment The situation, however, could become more favorable if the base rate (SELIC) keeps on falling, to something below 10% at the end of the year, with inflation also being around 4.5%.In this case, says Martins, more reasonable interest rates would be possible on borrowing for the purchase of transport equipment. CONJUNTURA | THE BUSINESS | CONTEXTO ECONÓMICO © Arztsamui | Dreamstime.com®
RkJQdWJsaXNoZXIy NDU0Njk=