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Economic News SEFAZ/RJ
Mar.2014
SUBGERAL
World Economy.

In the United States, for the third consecutive time, the Fed announced a reduction in
monetary stimulus package through the purchase of bonds to U.S. $ 55 billion a
month, up from U.S. $ 65 billion in February. The bank signaled that maintaining the
U.S. interest rate between zero and 0.25% pa will not take as thermometer only
unemployment, but a range of factors that influence economic conditions. The bank's
president, Janet Yallen, indicated that the global recovery is weak and slow, and the
monetary policy will remain accommodative for some time .

Despite the possibility of deflation in the Eurozone (March inflation reached its
lowest level since 2009) and the poor performance of service index (PMI), the ECB
decided to keep interest rates on porch 0.25% p a. Positive highlight was the creation
of jobs in Spain, which presented a greater drop in the number of unemployed in
March, since 2006. Moreover, Germany has announced a trade surplus close to 200
billion euros in 2013, which led the European Commission to consider a possible
threat to economic balance and the correct functioning of the Eurozone due to this
result.

Bad economic indicators from China, such as the Balance of Trade, put into question
the growth of 7.5% of GDP set by the government for 2014. The point is how the
Communist Party is willing to sacrifice the short -term growth for adoption of
structural reforms in the economy. In this sense, the market has speculated that a
package of economic incentives may be adopted by the government.

Within the geopolitical scenario, the result of the sanctions imposed by the West to
Russia, due to the annexation of the Crimea, is still uncertain. Russia is responsible
for providing 30% of the gas consumed in Europe and at least 50% of that gas passes
through pipelines in Ukraine. Moreover, the loan offer from the European
Commission to Ukraine could result in demands for loosening tight fiscal policy
undertaken by various countries of the European bloc.
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Economic News SEFAZ/RJ
Mar.2014
SUBGERAL
Brazilian Economy. The economic activity index of the Central Bank (IBC-Br) changed
1.26% between January 2014 and December 2013. Comparing January 2014 to same month
last year, the index increased 0.93% and considering 12 months (January), it up 2.29%.

Industry and trade data show that economic activity has been driven by consumption,
even at a slow pace, as the trend in recent months. In January 2014 the General
Industry shrank over the same month of the previous year ( -2.24%), driven by
Manufacturing (-2.32%). In 12 months (January), there was a slight increase of
0.54% in General Industry, with extensive retraction of Oil & Gas and Mining
(-4.28%). In Retail, up 6.12% in January 2014 compared to the same month of the
previous year and 4.30% over the past 12 month s i.

Studies point to a slowdown of the Brazilian economy in 2014 , when the estimated
growth of GDP is 1.8% (compared to 2.3% in 2013). Factors such as low business
confidence (and consumers), the loss of competitiveness, inflation (and interest rate)
with an upward bias and economic uncertainty are factors that discourage both
private investment and consumption.

The IPCA in March showed the highest percentage for the month since 2003
(0.92%). The activities that most affected: Food and Beverages, which varied 1.92%
(0.25% in March 2013), and Transport, with a variation of 1.38% (0.16% in 2013). In
12 months (March), up 6.15%. With some controlled prices still repressed, market
expectations for the IPCA at the end of 2014 are 6.35% ii.

Balance of Trade registered in the first quarter 2014 deficit of U.S. $ 6.1 billion.
Highlighting negative Petroleum, responsible for 75% of that deficit. In exports, the
highlight is Soybean with growth (in value and volume, respectively) of 84% and
98% compared to the first quarter of 2013.

The unemployment rate recorded monthly percentage of 5.1% in February 2014 iii.
Considering the number of jobs with a formal contract in the first quarter 2014,
strong growth was recorded in relation to two months of the previous year (+77%) ,
with more than three hundred thousand net jobs created iv.
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Economic News SEFAZ/RJ
Mar.2014
SUBGERAL
Rio de Janeiro Economy.
Industry. The General Industry in RJ practically remained constant (+0.1%) in February
2014, compared to same period of 2013. This result is a combination of declining in Oil &
Gas and Mining (-2.3%) and low growth in the Manufacturing (+0.6%). It should be noted
that in February the index of general industry (Oil & Gas and Mining and Manufacturing,
inclusive) was below the average in 2002 (base number).
In the year (January and February), industrial activity shrank by 2.2%, due to the fall in Oil
& Gas and Mining (-4.1%) and in Manufacturing (-1.8%). It can be observed in the graph
below that in 2014 the decline of the Manufacturing industry was heavily influenced by the
fall in the Pharmaceutics (-30.2%), Metallurgy (-5.7%) and Vehicles (-4.2%). The positive
highlight is the Rubber & Plastic (+43.6%), a sector which is recovering; is important to
note that currently this sector is strongly linked to the auto industry, falli ng in the year.
Industrial Production: YTD (February)
45%
30%
15%
0%
-15%
-30%
Brazil
Rio de Janeiro
Source: PIM/IBGE
Commerce. Retail sales (restricted) in RJ increased (+4.8%) in January 2014 compared
with the same period of 2013, a result lower than in the country (+6.1%). Considering the
extended retail trade, the situation remains: the Rio de Janeiro grew by 2.5%, compared to
3.5% in the country.
The highlight in Rio de Janeiro is the hypermarket sector and related, with greater weight
in the index, whose variation is roughly equal to the national rate (in 2013, compared to
2012, this activity in the state grew at half that observed in the country). On the other hand,
the negative highlight is the Equipment and office supplies, computer and communication ,
down 9.3%. This result is a consequence of the strong growth seen in 2013.
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Mar.2014
Economic News SEFAZ/RJ
Volume of Extended Retail Trade - January 2014
SUBGERAL
YOY
RJ
BR
Fuels and lubricants
6.2%
7.0%
Hypermarkets, supermarkets, food products, beverages and tobacco
5.2%
5.6%
Textiles, clothing and footwear
1.6%
3.9%
Furniture and household appliances
1.4%
5.9%
Pharmaceutical, medical, orthopedic and perfumery
7.6%
13.6%
Books, newspapers, magazines and stationery
6.8%
4.2%
Equipment and office supplies, computer and communication
-9.3%
-4.6%
Other articles of personal and domestic use
6.8%
7.6%
Retail
4.8%
6.1%
Vehicles, motorcycles, parts and accessories
-0.9%
-1.8%
Material of construction
-0.7%
3.9%
Expanded retail
Source: PMC/IBGE
2.5%
3.5%
Balance of Trade. In the first two months of 2014, exports in Rio de Janeiro grew 12.6%
over the same period last year. This growth is explained by the low performance in January
2013. Regarding imports, they dropped 1.8% in the period. Despite the increase in exports
and fall in imports, the trade balance in Rio de Janeiro was still negative (USD 1. 01
billion), but 26.8% lower than in the beginning of 2013.
i
PIM/IBGE e PMC/IBGE.
IBRE/FGV e FMI.
iii
PME/IBGE.
iv
CAGED/MTE.
ii
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