1. Politics –
The Brasil União party made official the launch of the pre-candidacy to the presidency of federal deputy Luciano Bivar (União-PE). The final decision on his permanence in the race will be taken in July, close to the party’s convention. (g1)
Former president Luiz Inácio Lula da Silva (PT) said that “PSDB is gone” at an event on Tuesday (31). (g1)
The lack of quorum made it impossible to vote on the tax reform, in the Senate’s Constitution and Justice Commission (CCJ), on Tuesday (31). With only 13 senators present (a minimum of 14 is required for deliberation), the meeting was cancelled. (Senate)
The FSB/BTG survey, released on Monday (30), indicates that former President Luiz Inácio Lula da Silva (PT) reached 46% (+5 percentage points) of voting intentions in the first round, and the current president, Jair Bolsonaro (PL), 32% (stable). As for the government’s evaluation, 50% (-1pp) considered the government as “bad/worst”, and 29% (-1pp) considered it as “great/good”. The disapproval rate decreased to 60% (-1pp) and the approval rate was 35% (stable).
The survey was conducted by telephone with 2,000 voters between 27th and 29th May.
Ipespe also released a survey conducted with 1,000 people, between May 30 and June 1, 2022, by telephone. The survey shows Lula with 45% (stable), followed by Bolsonaro with 34% (stable). In evaluating the government, 50% (-1pp) of those interviewed consider the government “bad/worst”, and 31% (stable) as “great/good”. The disapproval rate was 60% (stable) and the approval rate was 35% (stable).
Here’s a summary of the major electoral polls:
2. Economy – Brazil’s Gross Domestic Product (GDP) grew 1% in the first quarter of 2022, compared to the previous quarter. In comparison to the same period in 2021, growth was 1.7%. The performance was driven by services, which represent 70% of the national GDP. (Valor)
Brazil is once again the 10th largest economy in the world. The country had not appeared in the list of the ten largest economies since 2020. (Poder360)
Brazil’s public accounts, which include the federal government, states and cities, had a surplus of R$ 38.9 billion. It is the best result for the month in the historical series, which began in 2001. In the year to April, the surplus is R$ 148.5 billion, also a record. The gross government debt in relation to the GDP continues to shrink, reaching 78.3% of the GDP in April. (Estadão)
Unemployment fell from 11.2% to 10.5% from November 2021 to January 2022, in the quarter ended in April. It is the lowest mark for the period since 2015 when it recorded 8.1%. Despite the good result, the average income recorded a drop of 7.9% in the year. (Valor)
Itaú revised its GDP forecast for 2022 from +1.0% to +1.6%. In October 2021, the bank had projected GDP for 2022 at -0.5%, rose to 0.2% in March 2022, and to +1% in April 2022.
3. Public management – The Ministry of Mines and Energy formalized to the Ministry of Economy the request to include Petrobras in the PPI (Investment Partnership Program) portfolio for a future privatization of the company. (Estadão)
Minister Kassio Nunes Marques overturned two decisions of the TSE (Superior Electoral Court) in favour of state deputy Fernando Francischini (Union Brazil-PR) and federal deputy Valdeven Noventa (PL-SE). They were respectively annulled for fake news and abuse of economic power. (Folha)
An analysis:
1. The political trend for next week remains positive. The level of institutional conflict has receded. The presidential coalition remains strong and there have been no significant changes in the levels of support for the government. The electoral dispute has shown slight growth for Lula and stagnation for Bolsonaro compared to last month.
With the end of May and the presentation of Simone Tebet and Luciano Bivar’s pre-candidatures, the “third way” still shows no signs of vigour. The PSDB remains divided over the support for Tebet’s candidacy, which also faces resistance within the MDB. To be minimally viable and advance to the second round, the “third way” would need to take votes from both Bolsonaro and Lula and also convince those who intend to vote blank or annul their votes, something that remains difficult to occur.
In any case, according to the averages of the polls that were analysed, the difference between Lula and Bolsonaro was 17 percentage points in January and now stands at 12pp. Throughout these five months, the biggest contribution was Bolsonaro’s growth of 6 points, against only 1pp for Lula. However, from April to May, Lula grew by 2pp and Bolsonaro was stagnant. Several good poll aggregators, such as Estadão’s, indicate a bigger difference between the candidates, but all point to the tendency of this gap narrowing.
What can happen in June? Among the most plausible options, Bolsonaro may continue to stagnate, with small variations, more as a function of the institutional conflicts that come and go. The unlocking of growth could result from an improvement in the economy – such as something related to fuel prices or the concession of subsidies to the poorest population, including the establishment of a new calamity situation – or from some political alliance with politicians from the Northeast that could be converted into votes. The PL’s propaganda began on Thursday (2), but the effect remains known.
Lula, on the other hand, does not seem to have much potential to grow, especially with his recurrent verbal slips. The succession of disastrous statements and off-the-cuff speeches have annoyed close allies and alienated supporters who had been aligning themselves with the former president. Some think it is due to the “in the bag” attitude, while others believe it is a pure lack of control since strategy does not seem to be the case. The biggest chance for Lula to grow, for now, lies in the situation of the useful vote or the announcement of more concrete public policy proposals.
2. The trend in the economy remains positive for the coming week, with the release of favourable economic news. The GDP result, the unemployment rate and the public accounts figures do not solve all of the economic problems faced by Brazil, such as high inflation and the high Selic rate, and neither do they guarantee the continuity of the trend for the next quarter. Nevertheless, it is worth celebrating the fact that Brazil is once again among the ten largest economies in the world.
Considering the Brazilian context, these positive results serve as a baseline for the months to come, which, in comparison with other large economies, is good. Without observing the context, one analyses only the economic factor without considering the political, and then the result will always be invariably bad. Note that most economic news reports present the fact followed by a “but”, a negative bias that dominates more than half of the articles.
The IGP-DI for May will be disclosed on Wednesday (8) and the IPCA on Thursday (9).
3. The trend in public management remains neutral, with no significant changes.
Arthur Wittenberg 