The uncertainties and increasing risks related to Jair Bolsonaro's government's ability to send reforms to the National Congress and to implement its economic policy undermine confidence and undermine investments in Brazil.
The very weak picture of the Brazilian labor market indicates that companies have no intention of producing more or investing. The high levels of unemployment and the low quality of jobs offered reflect an almost stagnant environment. This hinders the acceleration of consumption, which will lead the country to another year of growth of around 1%.
According to the World Bank, 14 million Brazilians are at risk of returning to poverty. One of the main problems is that the Brazilian labor market is not absorbing the young. These unemployed young people are not served by any social program and also do not have access to unemployment insurance, as most are looking for their first job.
Meanwhile, the Brazilian government has been held hostage by the Pension Reform, so far its only subject and only measure in the macroeconomic area. Moreover, the government's actions are aimed at small microeconomic changes, which are not enough to change the almost stagnant picture of the Brazilian economy.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Monday, 22 April 2019
Thursday, 18 April 2019
Investors fear lack of political articulation of the Bolsonaro government
Jair Bolsonaro was never a liberal. During the more than two decades in which he has been a federal deputy in Brazil, his political performance has always been close to interventionist policies.
There is an evident difficulty of the president in defending the liberal agenda of the minister Paulo Guedes. To make matters worse, it is also very evident that the current president does not believe much of this agenda. For this reason, Bolsonaro defends little or almost nothing the agenda of its own government.
The CCJ stage in the Pension Reform, which was seen as something easy, ended up becoming very difficult for a disjointed government.
This has helped to worsen many of the country's growth projections. The government's ability to implement the reforms advocated during the campaign produced dismay among Brazilian and foreign investors.
The deterioration of the Brazilian economy will make even more difficult the life of a government that until now has been completely disarticulated in the political plane.
This picture produced a lot of reluctance from foreign investors to bet on Brazil, especially after it became clear the Brazilian government will not be able to produce the liberal shock that the market expected. As a result, Brazil will be experiencing continued volatility in the coming days.
There is an evident difficulty of the president in defending the liberal agenda of the minister Paulo Guedes. To make matters worse, it is also very evident that the current president does not believe much of this agenda. For this reason, Bolsonaro defends little or almost nothing the agenda of its own government.
The CCJ stage in the Pension Reform, which was seen as something easy, ended up becoming very difficult for a disjointed government.
This has helped to worsen many of the country's growth projections. The government's ability to implement the reforms advocated during the campaign produced dismay among Brazilian and foreign investors.
The deterioration of the Brazilian economy will make even more difficult the life of a government that until now has been completely disarticulated in the political plane.
This picture produced a lot of reluctance from foreign investors to bet on Brazil, especially after it became clear the Brazilian government will not be able to produce the liberal shock that the market expected. As a result, Brazil will be experiencing continued volatility in the coming days.
Monday, 8 April 2019
Decreases optimism with the Brazilian economy after 100 days of Bolsonaro's government
A Datafolha survey, released today (May 8, 2019), indicates that the Brazilian population optimism about the economy fell from 65% in December 2018 to 50% in April 2019.
Because of this, the financial market begins opens a quieter week in Brazil after the beginning of a larger dialogue between President Jair Bolsonaro and the National Congress.
Until now, the first 100 days of the Bolsonaro administration were a major mess. This picture spread to the financial market, which initially had a very positive expectation of the new government.
Several investors reviewed their positions and the Stock Exchange saw the dollar reach the price of $ 4.00 last week.
This week, the financial market and risky assets start in much less optimistic expectation. There is much more caution today for buying, for example, the kit Brazil.
Because of this, the financial market begins opens a quieter week in Brazil after the beginning of a larger dialogue between President Jair Bolsonaro and the National Congress.
Until now, the first 100 days of the Bolsonaro administration were a major mess. This picture spread to the financial market, which initially had a very positive expectation of the new government.
Several investors reviewed their positions and the Stock Exchange saw the dollar reach the price of $ 4.00 last week.
This week, the financial market and risky assets start in much less optimistic expectation. There is much more caution today for buying, for example, the kit Brazil.
Saturday, 6 April 2019
Brazilian government changes rules on purchases and sales of government bonds
A decision by the Brazilian Government reduced the difference between the investment rate and the redemption rate to 0.01% per year. The intention is to end the handicap in the short term of Tesouro Selic.
Previously, the difference between the investment rate and the redemption rate was 0.04%. The measure, announced on April 5, aims to end the fact that, in the short term, buying and selling government securities (Tesouro Selic or Tesouro Direto) yielded less than savings.
In Brazil, the Tesouro Selic is remunerated by the basic interest rate, the Selic, which currently stands at 6.5% per year. Savings yields 70% of the Selic, equivalent to 4.55% per year.
Previously, the difference between the investment rate and the redemption rate was 0.04%. The measure, announced on April 5, aims to end the fact that, in the short term, buying and selling government securities (Tesouro Selic or Tesouro Direto) yielded less than savings.
In Brazil, the Tesouro Selic is remunerated by the basic interest rate, the Selic, which currently stands at 6.5% per year. Savings yields 70% of the Selic, equivalent to 4.55% per year.
Wednesday, 3 April 2019
Speech of Brazilian Economy Minister in Congress overturns Stock Market
The Ibovespa, the main index of the Brazilian Stock Exchange, ended the day falling 0.94%, to 94,491.48 points. This is the lowest level in a week.
This change in the behavior of the Financial Market was a fruit of the defense of the Pension Reform, in the Chamber of Deputies, made by the Minister of Economy, Paulo Guedes.
The minister, who had already discussed harshly with Senator Kátia Abreu during his defense of the Pension Reform in the Brazilian Senate last week, was again criticized by the opposition for not presenting figures and studies to defend the Pension Reform today.
Due to this performance and the uncertainties that it generated, the dollar returned to increase by 0.54% and closed the day with the quotation of R$ 3.8790.
This change in the behavior of the Financial Market was a fruit of the defense of the Pension Reform, in the Chamber of Deputies, made by the Minister of Economy, Paulo Guedes.
The minister, who had already discussed harshly with Senator Kátia Abreu during his defense of the Pension Reform in the Brazilian Senate last week, was again criticized by the opposition for not presenting figures and studies to defend the Pension Reform today.
Due to this performance and the uncertainties that it generated, the dollar returned to increase by 0.54% and closed the day with the quotation of R$ 3.8790.
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