Another defeat: Brazilian Senate committee shuns Bolsonaro's decree easing guns law

The decree for the liberation of the arms proposed by the government of Jair Bolsonaro suffers a defeat in the Senate. The text was not approved. This shows a clear separation between the customs agenda defended by the government and the economic agenda, which despite the Bolsonaro government's continued inability to negotiate politically, continues to be moving in the Chamber of Deputies, mainly the Pension Reform.

Rodrigo Maia, the president of the Chamber of Deputies, has decided to maintain the economic agenda despite the ongoing criticism he makes of the current government of Jair Bolsonaro. Maia, who is an economist, said this week that the departure of economist Joaquim Levy from BNDES was "unprecedented cowardice."

Levy resigned last Sunday (16.June.2019), a day after President Jair Bolsonaro told a news conference Levy was with "a price on his head."

Joaquim Levy's departure from BNDES begins a difficult week for the Brazilian economy

The dispute between the Economy Minister, Paulo Guedes, and the president of the Chamber of Deputies, Rodrigo Maia, about the Pension Reform should continue in the coming days.

In addition, Joaquim Levy's exit from the BNDES brings more uncertainty to the government's economic team. Many analysts point out that Paulo Guedes would already be preparing a possible exit from the government. For political analyst Marco Antonio Villa, Paulo Guedes would be preparing his resignation due to economic stagnation and the changes made by the deputies in the Guedes proposed Pension Reform project.

Villa believes that Guedes can leave and blame the continuity of the economic crisis on the Chamber of Deputies and the Federal Senate. Despite this scenario, it seems that the House of Representatives and the Senate will continue with the Pension Reform and other policies aimed at improving the national economic picture.

The Central Bank's Focus report published today revised the GDP forecast to less than 1%, ie the economic picture continues to worsen. Analysts are forecasting cuts in the Selic rate because of Brazil's poor economic performance.

Economists interviewed by the Central Bank (BC) in the Focus Bulletin reduced for the 16th time the growth forecast of the Gross Domestic Product (GDP) in 2019. Thus, in the bulletin released on Monday (June 17, Brazilian economy for this year is forecast at 0.93%.

Request for the resignation of BNDES president, Joaquim Levy, leaves the Brazilian government even more ideologically isolated

Joaquim Levy's resignation request from the BNDES presidency left several members of the Brazilian National Congress with the impression that the economic team led by Paulo Guedes also became a "crisis plant." The president of the Chamber of Deputies, Rodrigo Maia, told Estado de S. Paulo newspaper that he was "perplexed" by the way the minister Paulo Guedes treated his subordinate. For him, Levy was a quality framework that he had to add to guarantee the reforms that Brazil needs right now.

After the resignation of Joaquim Levy, Bolsonaro government adds 19 casualties in the second step. This coupled with the number of ministers (3 in total) who have also left after untimely measures by President Jair Bolsonaro and his sons bring the number of people who left the government in the first six months of the administration to more than 20 people.

According to the magazine Exame, "the series of layoffs reinforces the tendency of the Bolsonaro government to entrench itself in more extreme positions".

Levy was the World Bank's chief financial officer between 2016 and 2018 and superintendent-director of Bradesco, one of Brazil's largest private banks, between 2010 and 2014. He was also finance minister during Dilma Rousseff's left-center government.

BNDES announces a profit of R$ 11.1 billion in the first quarter of 2019

The Brazilian National Economic and Social Development Bank (BNDES) recorded a profit of R$ 11.1 billion in the first quarter of 2019. The result represents an increase of 436.7% compared to the same period of 2018 when profit was R$ 2.1 billion.

Joaquim Levy, the president of BNDES, announced that the state bank will return to the National Treasury R$ 48 billion still in May 2019. This value refers to a part of a loan taken by the bank between 2008 and 2014.

Brazil: a desert of economic ideas

The current Brazilian economic scenario is catastrophic after years of low economic growth, fiscal uncontrol, and high unemployment rates. The whole contingency of the government that now hits hard federal universities and is sold by the government as a measure to try to cover the gap in the economy conceals, in fact, the lack of economic proposals of the current government for Brazil to leave the crisis frame in which is found.

The government uses the approval of the Pension Reform as the great measure capable of making Brazil grow again. The previous government, of president Michel Temer (who is back to jail in corruption probe), sold the labor reform in the same way. The then Minister of the Economy Henrique Meirelles went so far as to say that the reform would produce 6 million new jobs, but what actually occurred was the rise in unemployment.

Weak macroeconomic data are the result of the lack of proposals by the current government and the orthodox reforms adopted since the arrival of Joaquim Levy to the Brazilian Ministry of Economy during the second Dilma government in late 2014. Levy, now president of the BNDES, initiated a series of orthodox economic measures. Since there should be no Bolsonaro government spending increasing demand and Brazilian entrepreneurs do not seem willing to bet on the Brazilian economy, in the medium term the Brazilian economy should remain weak.

All indications are that in the coming months' recessive adjustments will continue amid the scrapping of Brazil's physical and social infrastructure.