Brazilian government cuts power rates to decrease inflation prices

January 25, 2013
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Brazilian government cuts power rates

The financial implications of running a business may be a worrisome aspect that executives fear the most. For instance, laws in Brazil will require many companies operating in this country to abide by tax regulations and other tariffs. However, with the help of a Brazilian lawyer, it becomes easier to navigate through the complicated litigation procedures within any foreign nation.

With the government attempting to make a stronger economy in Brazil, there are many monetary-based changes taking place that may affect business operations. Reuters reported that Brazilian President Dilma Rousseff announced significant reductions for the power rates in this country. Household electricity rates will be cut by 18.5 percent on average while rates for industrial consumers will drop by at least 32 percent.

The administration's decision to cut these rates, it shows the perceived threat of rising consumer prices, as inflation has increased faster than expected in the last month. The central bank has released reports that show a 20 percent cut in electricity prices should decrease inflation by a full percentage point by the end of 2013.

"Rousseff's expected announcement comes amid concern that reservoirs at hydroelectric dams, which provide two-thirds of Brazil's power, are at their lowest level in a decade," the news source stated. "A budding energy crisis early this year and speculation that the country had to use more expensive thermal energy had cast doubt on Rousseff's ability to lower energy costs."

Nelson Hubner, country head of the national electricity Agency (Aneel), has said that there would be no issues with power during the 2014 FIFA World Cup in Brazil, according to the online publication Parda Phash.

Businesses operating in Brazil would be wise to consult a Brazilian law firm regarding the financial status of the country and its plans to transform consumer inflation prices.

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