JOSE MATIAS-PEREIRA is an economist, jurist, PhD in Political Science from the Complutense University of Madrid and a PhD in Management, he is a Research Professor in the Advanced Study Program in Accounting of the University of Brasilia.
The pre-election race in the presidential elections in Brazil entered its decisive phase on the 16th with the start of free election campaigning on radio and television. On October 2, most of the more than 156 million eligible voters will go to the polls to choose a president who will rule the country during the period 2023-2026. In the event of a possible second round, the choice will be made by voters on October 30, 2022.
In this election, which has candidates for the presidency of several political parties, for the first time in the country there will be a competition between the incumbent president and the former president. This is a clash between two candidates with different views on how they govern: President Bolsonaro is on the political spectrum on the right, while former President Lula is on the left. Given that both took the same position, it can be predicted that the clashes will focus on comparing economic indicators – falling unemployment, falling inflation and growing gross domestic product (GDP) – political stability, strengthening institutions, democracy. and corruption.
On the external front, the discussion will focus on the crisis caused by the Covid-19 pandemic, which continues to have an uneven impact on the economies of most countries. Revisions to forecasts made by the International Monetary Fund (IMF, July 2022) indicate that global growth is expected to decline from 3.6% to 3.2% in 2022 as a result of a worsening international scenario, in particular due to higher inflation. around the world, a slowdown in China and the negative consequences of the war between Russia and Ukraine. According to the IMF, the world may soon be on the verge of a global recession.
In the aforementioned IMF report, Brazil is pitted against the world as the country’s estimated GDP growth rate has been raised from 0.8% to 1.7% this year. In turn, the market predicts GDP growth at the level of 2%, and inflation by the end of the year is expected to be close to 6.5%. It should be noted that the unemployment rate in Brazil fell to 9.3% in the second quarter of 2022 (BIGE). This is the lowest level since 2015.
According to IBGE data from 1998 to 2018, governments with inflation and unemployment rates below double digits managed to get re-elected or succeed. This was the case with the re-election of Fernando Enrique Cardoso (FHC) in 1998, when his first term in the IPCA ended at 1.6% and the unemployment rate at 7.8%. Despite the low GDP growth in 1998, which amounted to 0.10%, the FHC electorally used the fact of inflation control (Plano Real) to its advantage. It should be noted that by the end of his second term in 2002, inflation reached 12.5%, and unemployment – 11.7%. In the same year, the FHC failed to elect its candidate José Serra.
It can be seen that the unfavorable economic scenario at the end of the FHC’s second reign was decisive for Lula’s election in 2002. Lula, who was re-elected in 2006, finished his first term in the IPCA at 3.1% and an unemployment rate of 8.4 %. At the end of his second term, in 2010, IPCA reached 5.9% and unemployment reached 6.7%, making his candidate Dilma Rousseff eligible for election.
In 2014, Dilma ended her government with an IPCA of 6.4% and unemployment at 4.3%. She was re-elected but did not complete her term. The worst economic downturn experienced by Brazil in 2015-2016, resulting in a fall in GDP of 3.8% in 2015 and 3.6% in 2016, was reflected in the growth of political instability in the country, which contributed to its removal from presidency of the republic (impeachment) at the end of August 2016. In 2018, President Michel Temer, even with inflation curbed (3.7%), had a high unemployment rate (11.7%), exacerbated by a rather unstable political environment. His candidate Meirelles lost. In this climate of political and economic turmoil, the current president, Jair Bolsonaro, was elected.
We cannot ignore the problem of corruption in these presidential elections. Former President Lula’s opponents know that resurrecting in voters’ minds the costs associated with the scandals exposed in the Menzalao and Lava Jato trials will increase their dropout rate, especially among undecided voters.
It turns out that economic growth and political stability are intertwined at different levels. As an analysis of economic performance from 1998 to 2018 shows, falling inflation and unemployment, to which can be added the beneficial effects on the economy of income redistribution programs for the poorest segments of the population, are significant variables in the election race, since they contribute to a sense of well-being in a population that is more optimistic about the future of the country and its financial situation. Thus, based on the close relationship between economics and politics, it can be said that the performance of the economy will be a decisive factor in choosing the President of the Republic in the October 2 elections.
Yesterday, financial agents evaluated the opposite decision of the Federal Supreme Court (STF) regarding the so-called secret budget. In addition, a decision was made by STF Minister Gilmar Méndez to issue an injunction that would exclude the Bolsa Família from the spending cap rule, with investors trying to understand how this measure would affect the processing of the transitional PEC in the Chamber of Deputies. Oh this PEC!!!!
Since he is an exchange investor, any reading that the budget will be exceeded or become more flexible will negatively affect the exchange market, whether through the PEC or in any other way. We will continue with volatility today.
Looking beyond, the US Central Bank (Fed), although slowing down the pace of monetary tightening at its December meeting, issued a tougher-than-expected statement warning that its fight against inflation was not yet over, raising fears that rising US interest rates will push the world’s largest economy into recession.
The currency market continues to react to political news. The voting on the PEC is saved for today. It is expected that it will indeed be reviewed to open the way tomorrow for discussions on the 2023 budget.
Yesterday, the spot price closed the selling day at R$5.3103.
For today on the calendar we will have an index of consumer confidence in the eurozone. Good luck and good luck in business!!
The former president of the Corinthians dreams of working for the CBF as a national team coordinator. He was consulted shortly after Lula’s election.
Former Corinthians president Andrés Sánchez was advised to take a position in the Ministry of Sports under the administration of Lula (PT). However, he ruled out a return to politics. dreams of taking over the coordination of CBF selectionHow do you know PURPOSE.
No formal invitation was made to the former Corinthian representative, only a consultation on a portfolio opportunity with the new federal government, which will be sworn in on January 1, 2023.
Andrés was the Federal MP for São Paulo from 2015 to 2019. At that time he was elected by the Workers’ Party. However, the football manager begs to stay in the sport, ruling out the possibility of getting involved in politics again.
Andrés Sanchez’s desire is to fill the position of CBF tackle coordinator, which should become vacant after the 2022 World Cup. Juninho Paulista fulfills this function in Brazil’s top football institution.
The former president of Corinthians was in Qatar to follow the World Cup along with other figures in Brazilian football. During his time in the country, he strengthened his ties with the top leadership of the CBF.
BRUSSELS, DECEMBER 19 (ANSA). European Union countries reached a political agreement on Monday (19) to impose a natural gas price ceiling of 180 euros per megawatt hour (MWh). The main sources of income for Russia and the minimization of the use of energy as a weapon by the regime of Vladimir Putin.
The agreement was approved by a supermajority at a ministerial meeting of member states in Brussels, Belgium, after months of discussions about the best way to contain the rise in natural gas prices in the bloc caused by Russia’s invasion of Ukraine. .
The value set by the countries is well below the proposal made by the European Commission, the EU’s executive body, in November: 275 EUR/MWh. However, the countries leading the cap campaign were in favor of an even lower limit, around 100 EUR/MWh.
Germany, always wary of price controls, voted in favor of 180 euros, while Austria and the Netherlands, also skeptical of the cap, abstained. Hungary, the most pro-Russian country in the EU, voted against.
The instrument will enter into force on 15 February, but only if natural gas prices on the Amsterdam Stock Exchange exceed 180 euros/MWh for three consecutive days. In addition, the difference compared to a number of global benchmarks should be more than 35 euros.
Italy, the EU’s biggest supporter of the ceiling, has claimed responsibility for the measure. “This is a victory for Italy, which believed and worked for us to reach this agreement,” Environment and Energy Minister Gilberto Picetto tweeted.
“This is a victory for Italian and European citizens who demand energy security,” he added.
Currently, the gas price in Amsterdam is around 110 EUR/MWh, which is already a reflection of the agreement in Brussels – in August the figure even broke the barrier of 340 EUR/MWh.
However, Russia has already threatened to stop exports to countries that adhere to the ceiling. (ANSA).
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