Russia canceled by countries and companies, government cuts IPI and what matters in the market

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How sanctions on Russia affect Brazil

The sanctions imposed on Russia could end up affecting the arrival of products from there to Brazil. The biggest concern is with fertilizers, which accounted for 62% of imports from Russia in 2021.

Understand: The withdrawal of Russian banks from the Swift system could prevent large financial institutions in other countries from offering a letter of credit – a kind of guarantee – for operations with Russian companies, undermining the security of business.

What is swift? It is a communication network used by banks to send standardized messages about transfers of values ​​between themselves and to customers and orders for the purchase and sale of assets. The system is crucial to international trade.

In numbers: last year, Brazil imported from Russia a record amount of $5.7 billion (R$ 29.2 billion), according to data from the Ministry of Economy. Of this total, $3.5 billion (R$ 18 billion) were from fertilizers.

economic war: sanctions imposed by the West avoid hitting sectors such as energy and grains in Russia, which would put further pressure on global inflation.

• Even so, large multinationals have avoided the country. To cite one example, shipping giants Maersk and MSC have said they will stop shipping containers to Russian ports.
• The flight from Russia helps to pressure commodity prices, as columnist Vinicius Torres Freire points out. On Tuesday, Brent crude rose 9% and came to $107at its highest since 2014.
• Wheat, with 30% of world production concentrated in Russia and Ukraine, rose 7.5%. The high should put pressure on the prices of bread and pasta in Brazil, as the country is one of the largest importers of cereal. the corn rose 6%and should also raise meat production costs.
• See here which Brazilian stock exchange companies may be affected by the economic impacts of the war in Ukraine.

Russia canceled by countries and companies

The sanctions imposed by the governments of the West and the flight of companies from Russia have hit Moscow’s financial market hard and also complicate the lives of the country’s citizens.

Understand: Among the targets punished by Western countries in response to the war in Ukraine are the assets of President Vladimir Putin, his allies and Russian oligarchs, as well as the country’s large companies and banks.

• See the list of the main sanctions imposed so far by the United States, the United Kingdom and the European Union.

in the private sphereApple on Tuesday suspended sales of its products in the country and blocked access to RT News and Sputnik apps outside Russia – a decision already taken by other big techs.

Consequences: In response to the ruble’s sharp devaluation – the currency has plummeted 30% against the dollar since the invasion – the local central bank raised interest rates from 9.5% a year to 20% per year.

Opinion: Putin may take Kiev, but even if he does, he will have become weaker, not stronger, says Paul Krugman, Nobel laureate in economics.

Government cuts IPI, and entities complain

The Jair Bolsonaro government (PL) last Friday (25) made a linear cut of 25% in the IPI (Tax on Industrialized Products).

Understand: the measure affects all sectors in addition to products containing tobacco. According to Minister Paulo Guedes (Economy), more than 300,000 companies will benefit from the reduction, which has a tax impact calculated at R$ 19.6 billion this year alone – half for the Union and the other half for states and municipalities.

The IPI is a regulatory tax and the legislation does not require budgetary compensation.

Reviews: the reduction is rejected by the states. They pointed out that similar measures had already been adopted in the past and failed to encourage the industry or increase revenue to a level that would justify the drop in revenue.

Guedes’ team argues that this time is different because, before, the cuts did not reach the sectors broadly – ​​benefiting only white goods (stoves, refrigerators, washing machines, etc.) and automobiles.

Examples of products that will have a reduced IPI rate:

• Microwave, from 35% to 26.25%
• Refrigerators, 15% for 11.25%
• Cellular, 15% for 11.25%
• Televisions, from 15% to 11.25%
• Iron, from 10% to 7.5%

According to Guedes, the government even studied a 50% cut in the tax, but limited it to 25% to avoid a greater impact on industries in the Manaus Free Trade Zone, which has as one of its differentials the exemption from IPI on goods produced in the region.

5G connections should reach 1 billion this year

This year should end with 1 billion 5G connections made in the world, which would be double the mark reached in 2021.

The projection is by the GSMA, an entity that brings together telecommunications companies and organizes the MWC (Mobile World Congress), one of the largest events in the sector, which takes place in Barcelona.

In numbers: the report points out that 5G will account for a fifth of global connections in 2025, and that 4G will reach the top of its 60% market share in 2023.

In Brazilabout 80% of mobile connections are via the 4G network, a percentage that would remain unchanged until 2025. In this interval, fifth-generation technology should capture the 20% remaining that today are among the oldest.

THE sheet showed that pure 5G, called standalone, should only arrive in the country from July onwards, and, at least in the beginning, it will be salty: it should not go out for less than R$ 250 per month for postpaid bills and with restriction of data usage.

why does it matter: 5G is linked to the connection of objects and has the potential to transform traditional Brazilian sectors, generating solutions for Industry 4.0 and telemedicine, for example.

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