Brazil meets 2016 inflation target

A consumer shops for apples at a market in Sao Paulo, Brazil. (Reuters/Paulo Whitaker)
Updated 11 January 2017
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Brazil meets 2016 inflation target

BRASILIA: Brazil’s inflation finished 2016 within the official target range, government data showed on Wednesday, reinforcing calls for an aggressive cycle of interest rate cuts by the central bank as the economy remains mired in recession.
Consumer prices rose 6.29 percent in 2016, slowing from an increase of 10.67 percent in 2015 and below the 6.5 percent ceiling of the official goal. Prices rose 0.30 percent in December from November, slightly below market forecasts for an increase of 0.33 percent.
It was the fourth month in a row in which prices rose more slowly than economists in a Reuters poll had expected, and the lowest inflation rate for December since 2008.
During most of 2016, the central bank had been widely expected to miss its target for the second year in a row. The surprisingly fast slowdown in prices prompted the central bank to start cutting interest rates from 14.25 percent beginning in October to try to avoid a third year of recession.
Most economists expect a reduction of 50 basis points in the benchmark Selic rate, to 13.25 percent. “This reinforces bets that the central bank will give at least a stronger signal that it will cut rates faster going forward,” said Marcio Milan, an economist with Sao Paulo-based consultancy Tendencias.
Inflation is expected to end 2017 at 4.8 percent, according to a weekly central bank poll of economists. However, it should fall to as low as 4 percent by August, below the 4.5 percent target midpoint, said Leonardo Franca Costa, an economist with Sao Paulo-based research firm MCM. Chronically high inflation has dented consumer confidence and hindered investment plans by companies in Brazil for years, as interest rates remain among the highest for major world economies. Part of the reason for the inflation slowdown is massive unemployment, which has helped curb prices of services.
A measure of services inflation that excludes volatile items rose 6.27 percent in 2016, down from 6.54 percent in the 12 months through November.


Toyota captures data goldmine in $1 billion Grab bet

Updated 7 min 29 sec ago
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Toyota captures data goldmine in $1 billion Grab bet

  • Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers
  • Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage
TOKYO/SINGAPORE: By pumping $1 billion into ride-hailing firm Grab, Toyota Motor stands to gain a passenger-side view of tens of thousands of cars across Southeast Asia, tracking how fast they drive, how far they travel and the time they spend stuck in traffic.
The Japanese automaker said it aims to install its TransLog driving recorder devices into Grab’s fleet of lease cars to access the data on driving patterns that will be crucial to its push into the nascent mobility-as-a-service industry.
“Only ride-hailing companies have good, extensive data on usage, so automakers want to be connected with that,” said Egil Juliussen, director of research for automotive infotainment and advanced driver assistance systems at IHS Markit.
Grab already monitors driving behavior through its app to increase ride safety, sending emails about speed and braking, for instance, to its drivers, such as Singapore’s Rennu MaHajjan.
“With this system, it keeps me in check,” said MaHajjan, 57.
It will get even more vehicle data with Toyota, which has been harvesting data through TransLog since 2016 in sales and trials with taxi firms and car-hailing operators including Grab. The data gives Toyota insight into fleet management as it develops services including futuristic concepts such as pay-per-use mobile restaurants.
The latest deal, announced last week, gives Toyota access to a single pool of vehicles which potentially eclipses all others. That will allow it to capture a volume of data that would be difficult to collect from private cars which are only used for under 5 percent of any given day, often on routine commutes.
In return, Grab will be able to expand services such as food delivery and digital payments using Toyota’s $1 billion investment — the biggest by a traditional automaker in a ride-sharing app maker.
The deal reflects how automakers are clamoring for access to ride-hailing firms’ extensive user bases through a spate of partnerships, as they compete with technology companies to develop autonomous cars and next-generation transport services.
Toyota’s vision of such services includes convoys of shuttle bus-sized, self-driving multi-purpose vehicles used, for instance, as pay-per-use mobile restaurants and hotels, which the automaker plans to develop and customize for retail customers.
“There’s data about the car, and then there’s also data about the service — how many customers drivers have, what’s the average mileage, where the rides are concentrated,” said Juliussen. “Having that picture in all the major (Southeast Asian) cities, that becomes very valuable.”
Toyota and Grab will be able to use the data for possible collaboration on data-driven services such as vehicle diagnostics and customized insurance plans based on driver usage.
The data will also help Grab maintain efficiency in fleet maintenance as it expands deeper into Southeast Asia where it operates in over 200 cities. It has said it wants build the region’s largest car rental fleet by the fourth quarter of 2018.
“Vehicle maintenance costs, insurance costs, these are bread-and-butter issues for ride-hailing drivers,” said Chua Kee Lock, chief executive of Vertex Venture Holdings in Singapore, an early Grab investor.
Industry experts said Toyota could expand its data service to more mobility firms such as Didi Chuxing, Uber Technologies Inc. and Amazon.com Inc, with which it has separate partnerships.
“This partnership with Toyota will keep Grab’s platform ‘sticky’ and give drivers less incentive to switch to competitors,” said Chua. “This is Grab’s edge over the long-run.”