1. Politics – The president of Petrobras, José Mauro Coelho, resigned on Monday (20), after pressure from President Jair Bolsonaro (PL) and the president of the Chamber of Deputies, Arthur Lira (PP-AL). (Valor)
The Minister of Mines and Energy, Adolfo Sachsida, said the government cannot control fuel prices, criticized Petrobras’ profit and defended the privatization of the company as a way to increase competitiveness. (Câmara)
The Federal Police arrested, on Wednesday (22), the former Minister of Education, Milton Ribeiro, and pastors in the case of favouritism in the release of federal funds. Ribeiro was released on Thursday (23). Senators are trying to create an investigation of the case. (Estadão)
The Workers’ Party (PT) released the programmatic guidelines for the presidential campaign. The party decided not to revoke the labour reform but proposed a revision. (CNN)
A PoderData poll shows Lula (PT) leading the electoral race with 44% (+1 percentage point) of voting intentions in the first round. Bolsonaro (PL) registered 34% (-1pp). Disapproval of the government was at 52% (stable) and approval at 30% (+2pp). The survey was conducted from 19 to 21 June, by telephone, with 3,000 voters (Poder360)
The Ideia/Exame poll, conducted by phone with 1,500 voters, between June 17 and 22, shows Lula with 45% (+1pp), and Bolsonaro with 36% (+4pp). For 44% (stable), the government is evaluated as “bad/worst”, and 33% (+5pp) consider it “great/good”. Bolsonaro’s work is disapproved by 46% (+2pp) and approved by 36% (+4pp). (Exame)
The third poll released was Datafolha. Lula registered 47% (-1pp) of voting intentions, in the first round, against 28% (+1pp) for Bolsonaro. The government’s disapproval rating stood at 47% (-1pp) and the approval rating at 26% (+1pp). Datafolha interviewed 2,556 voters in person between June 22 and 23 (Folha
Here’s a summary of the major electoral polls:
2. Economy – The government is trying to create a diesel fuel voucher of up to R$1,000 for truck drivers. The benefit would be created within a state of emergency, to avoid violations of electoral law. Moreover, it is being studied to increase the Auxílio Brasil social programme from R$ 400.00 to R$ 600.00. (Valor)
The federal government is studying to increase the value of meal tickets as compensation for abandoning the idea of readjusting salaries this year. (Estadão)
Aneel (National Electricity Regulatory Agency) authorised increases of up to 64% in the electricity tariffs to pay for the use of thermal power plants. The new values will be valid as of July. (Folha)
Sales in shopping malls registered an increase of 81.5% in April, in comparison with the same month last year. (Estadão)
Fiat, Volkswagen and General Motors are paralyzing activities due to a lack of electrical components. The measure is mainly due to the war in Ukraine and lockdowns in China.
In March, Brazil registered the opening of 357,000 new businesses. It is the new record for the month since 2010. (Poder360)
The federal tax collection reached R$ 165.3 billion in May, a real increase of 4.13% in relation to May 2021 and the highest value for the month in the historical series, since 1995. (Valor)
The Brazilian Central Bank raised its forecast for GDP growth in 2022 from 1% to 1.7%. (Folha)
3. Public Management – IBGE started, on Monday (20), the first collection of the Brazilian Demographic Census 2022. The Institute will map 5,570 municipalities to obtain information on urban infrastructures, such as accessibility, circulation and public facilities. (O Globo)
The Brazil-OECD Week was held in Brasília. At the beginning of June, the OECD approved the roadmap to formally begin the process of Brazil’s entry into the organization. (Estadão)
A federal police officer who arrested the former education minister indicates that there was interference in the conduct of the case. (g1)A
An analysis:
1. The political scenario is now in a neutral trend. The main reason was the disarticulation provoked by the situation with Petrobras and the arrest of Milton Ribeiro. The government suffered political damage in both cases. Searching for a political solution to an economic problem, Bolsonaro and Lira created unnecessary noise at a delicate moment for the presidential election. The attempt to create an investigation and review the “Leis das Estatais” remains not viable and does not create a political edge for Bolsonaro. The episode with Ribeiro creates a problematic short-term situation, forming ripples that disrupt political arrangements in Congress, and generating long-term issues for Bolsonaro’s campaign narrative. The anti-corruption discourse may be weakened by this episode.
This double setback for the government may have slightly reduced the support of the presidential coalition, but it did not reduce the government’s approval levels and did not cause significant variations in the electoral polls. It cannot be denied, however, that the electoral picture is shaping up favourably for Lula, something that can be seen by the approaches of businessmen and bankers this week when several news reports carried the headlines that he could win the election in the first round. Aware of this less favourable scenario, Bolsonaro has avoided institutional conflicts.
Next week, it is worth mentioning the public hearing to be held in the Senate Foreign Relations and Defence Commission (CRE), on Wednesday (29), with the Minister of Defence, Paulo Sérgio Nogueira, and the commanders of the Armed Forces. The hearing is part of the Senate’s regulations, but electoral issues, including the tensions with the Superior Electoral Court (TSE), might come up.
2. The economy continues on a positive path. Although both persistent inflation (IPCA-15 of June at 0.69%) and the scenario of uncertainty are worrisome, the diffusion index seems to be diminishing and should drop well into July. The increase in electricity tariffs, however, could weigh in the next months.
The pressure for the government to spend more, both with the “Auxílio Brasil”, the fuel issue, and the increase in meal vouchers for civil servants, do not generate major impacts on the government’s accounts. The effect tends to be more political, in the search for solutions so that the population has more resources available (either by reducing inflation or by granting subsidies). It is uncertain whether or not this movement will get Bolsonaro more votes, but the political purpose seems to be clear. The increase in tax collection, even if due to inflation, also contributes to a less problematic fiscal situation.
Finally, the news about the opening of companies is positive, as well as the revision of the 2022 GDP growth made by the Central Bank.
3. Public management continues with a neutral trend. The issue of the beginning of Census 2022 and the Brazil-OECD week were positive issues in the week. The actions of the Federal Police, both in the investigation of the murders in Amazonas and the arrest of former minister Milton Ribeiro, were diligent and correct. Two episodes, however, held back the metrics: the secrecy decreed on the actions of the Federal Highway Police (PRF) agents and the suspicion of interference in the conduct of the case involving Ribeiro.
Arthur Wittenberg 