Lula Calls on Petrobras to Reinvest Profits; Peru’s Growth Outpaces Forecasts

Bloomberg Línea — Brazil’s former President Luiz Inácio Lula da Silva, who is ahead in the polls in the run-up to the October election, said Tuesday that part of state oil company Petrobras’ (PETR3, PETR4) profits should be reinvested in the construction of new refineries and research. “[In 2021] Petrobras’ profit was 106 billion reais ($20.5 billion), half of this money should be applied to building new refineries and research for Petrobras to continue growing, however, dividends were distributed among shareholders and the people were left sucking their thumbs”, Lula said in an interview with radio station Espinharas.

Peru’s economy grew 2.86% in January, above expectations, driven by the hospitality sector, as well as logistics and courier services. However, the continued weakening of governance in the country is a risk that Fitch Ratings perceives as latent for the Peruvian economy, and in particular for the agency’s sovereign ratings.

On the region’s stock markets, Chile’s Ipsa (IPSA) index had the best performance in Latin America, closing the day with an increase of 0.75%, and Mexico’s stock market was the second-best performer, with the S&P BMV/IPC (MEXBOL) up 0.38% at closing.

Following is a roundup of Tuesday’s news from Bloomberg Línea and Bloomberg reporters across Latin America.

Argentina:

• Amid the increase in food prices, Argentina’s February inflation hit 4.7%, statistics agency INDEC reported, higher than estimates by private consulting firms, which estimated 4% for the second month of the year. INDEC said the inter-annual inflation was 52.3%, which surpasses the total for 2021.
• The government has achieved approval of the IMF agreement bill with the support of the opposition, and aims for it to be signed into law this week.
• And amid the impact of the Russian invasion of Ukraine on global food supplies, the government has launched a program to guarantee domestic food supplies and ensure fair prices.

Brazil:

• Leading in the polls in the run-up to the October election, former President Luiz Inácio Lula da Silva said Tuesday that part of state oil company Petrobras’ (PETR3, PETR4) profits should be reinvested in the construction of new refineries and research. “[In 2021] Petrobras’ profit was 106 billion reais ($20.5 billion), half of this money should be applied to building new refineries and research for Petrobras to continue growing, however, dividends were distributed among shareholders and the people were left sucking their thumbs”, Lula said in an interview with radio station Espinharas.

Read More: Lula’s Criticism of Petrobras Echoes 2002 Campaign

Chile:

• Chile’s Interior Minister Izkia Siches and her delegation had to suspend a visit to Ercilla, in the Araucanía region, on Tuesday morning when unknown persons set up barricades and fired weapons in the air.
• There is a “high probability” that the Chilean economy will be in recession toward the end of this year, according to BCI Estudios.

Colombia:

• Colombian companies are in a strong position to resist a potential change in economic policy if leftist senator Gustavo Petro is elected president, according to a report by Fitch Ratings’ corporate analysis unit.
• An EU mission has found numerous indications of vote buying in the Colombian elections, while 20% of users interacting with the accounts of candidates in the legislative elections and internal consultations of three political coalitions in Colombia were bots.

Ecuador:

• President Guillermo Lasso has not ruled out dissolving the legislature in view of what he described as a permanent “boycott” of the National Assembly to the detriment of the development of Ecuador.
• The use of digital payments is growing in Ecuador, via the use of smartphones, with citizens using money transfer apps to send money to family and friends.

El Salvador:

• In an interview with Bloomberg Línea, Tourism Minister Morena Valdez spoke about the government’s efforts to position itself as a specialized destination and said that the country wants to be a surfing mecca, to attract investment and boost its economy.

Mexico:

• 2018 presidential candidate and former governor of Nuevo León state, Jaime Rodríguez, alias ‘El Bronco’, has been arrested for allegedly embezzling funds. As a candidate, standing as an independent in the election won by current President Andrés Manuel López Obrador, Rodríguez had proposed cutting off the hands of those caught stealing as a crime deterrent measure.
• Lower automobile inventories in Mexico due to global supply chain problems are causing changes in the composition of the Mexican automotive market, with the German automaker, Volkswagen, being one of the most affected.

Panama:

• The construction industry in Panama, which in the third quarter of 2021 had a slight recovery of 8.8% in its share of GDP, is bogged down at the negotiating table as workers and builders are trying to reach wage agreements amid the threat of an imminent strike.

Peru:

• The Peruvian economy grew 2.86% in January, above expectations, driven by the hospitality sector, as well as by logistics and courier services.
• The continued weakening of governance in Peru is a risk that Fitch Ratings perceives as latent for the Peruvian economy and in particular for the agency’s sovereign ratings.