Cheaper currency no panacea for crippled Brazilian exporters

jueves 19 de noviembre de 2015 06:00 GYT
 

By Paulo Prada

JARAGUA DO SUL, Brazil Nov 19 (Reuters) - To hear Brazil's government tell it, businesses like Jamo Equipamentos should be booming.

With Brazil locked in its worst recession in three decades, the maker of heating equipment, like other exporters, should at least be enjoying a newfound competitive advantage: the plunge in the currency, which has lost a third of its value against the dollar this year.

A weaker Brazilian real makes Jamo's products cheaper in China, India and other foreign markets. Brazil's government hopes the company and other manufacturers will take advantage and drive an export-led economic recovery.

But a host of factors still hold exporters back, from a depreciation of currencies in many buyer markets to a reliance on imported raw materials to a global trade slump.

"It's only part of the equation," says Giovano Ghizoni, one of Jamo's founders in the small, southern state of Santa Catarina. He expects exports this year to account for about 20 percent of revenues, about the same as in the past few years.

"To say the currency will save us is just rhetoric," he says.

The rhetoric is increasingly common from President Dilma Rousseff's government, scrambling to find glimmers of good news as the economy shrinks an expected 3 percent or more this year.

"An expansion of exports is what will launch the resumption of our growth," Rousseff told state governors at a recent gathering in Brasília, the capital.   Continuación...