Saturday, June 05, 2004
Bad news outweighs the good for Brazil,

Brazil's financial markets lost ground after Opec announced a lower-than-expected output increase, heightening fears that rising oil prices could derail a worldwide economic recovery.

Currently high oil prices took the shine off approval by the lower house of Congress of a conservative rise in Brazil's minimum wage. The vote was seen as a test of the government's legislative clout and ability to keep to a fiscally sound package.

Civil servants' pensions are pegged to the minimum wage and any rise has a direct impact on public coffers. Investors were paying close attention to the vote for assurance that IMF-agreed budget goals would not be put at risk.


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