SAO PAULO May 7 Brazilian industries are
struggling with a less competitive exchange rate and fast wage
growth, the chief executive of giant mining company Vale SA
said on Tuesday, underscoring issues that have
hampered corporate earnings.
"Having the currency out of place and the significant salary
increases are the cost of the great advance in Brazilians'
incomes. Everything has its counterpart," Vale CEO Murilo
His remarks at a gathering of executives and government
officials sponsored by a Brazilian magazine underscored eroding
corporate profitability in Brazil amid the fastest cost
inflation and wage growth in years.
More than 40 percent of Brazilian companies polled by
Thomson Reuters reported lower profit margins in the first
quarter, mainly due to rising labor costs and operating
Central bank interventions have helped to weaken Brazil's
currency, the real, by about 25 percent in two years, but
it remains about 50 percent stronger than it was a decade ago.