The Week Ahead in Brazil #114

1. Politics – The University of São Paulo (USP) Law School released a manifesto in defence of democracy on Tuesday (26). It is a reaction to the recurring remarks of President Jair Bolsonaro (PL) casting doubt on the electronic ballots. The letter is to be read at USP on August 11 and has more than 300,000 signatures from academics, businessmen, bankers, class entities and representatives from civil society. (CNN)

The president of the lower house, Arthur Lira (PP), expressed, at his party convention, that he trusts the electoral system. After the event, the President’s Chief of Staff, Ciro Nogueira (PP), said he believed in the reliability of the ballot boxes, but that there was room for improvement. (Folha)

The president of the Superior Electoral Court (TSE), Edson Fachin, affirmed that the Electoral Justice will not accept any form of “intimidation” and that society has shown in the last few weeks that it “will not tolerate electoral denialism”. (Valor)

On Wednesday (27), MDB officially approved Simone Tebet’s candidacy as a presidential candidate. The vice-president has not been defined yet. (Valor)

The president of União Brasil, Luciano Bivar, has given up his bid to run for the Presidency of the Republic. The announcement was made this Sunday, 31, during the party’s convention. Bivar said he will seek re-election to the lower house and that Senator Soraya Thronicke (União Brasil-MS) will be the party’s candidate for the Presidency. (Estadão)

The Attorney General’s Office (PGR) asked the Federal Supreme Court (STF) to dismiss 7 of the 10 investigations requested by the Covid parliamentary inquiry (Covid da CPI). In five of them, the CPI’s final report requested the indictment of President Jair Bolsonaro (PL). (Folha)

Ipespe/XP research shows Luiz Inácio Lula da Silva (PT) leading the voting intentions in the first round with 44% (-1pp), Jair Bolsonaro (PL) with 35% (+1pp). The government is disapproved by 59% (-1pp) and approved by 36% (+1pp). The government is considered as “bad/worst” by 49% (-1pp) and as “great/good” by 32% (+1pp). The survey was conducted by telephone with 2,000 voters from July 20 to 22.

The FSB/BTG poll shows Lula with 44% (+3pp) and Bolsonaro with 31% (-1pp). The government is disapproved by 58% (stable) and approved by 36% (stable). The government is considered “bad/bad” by 47% (stable) and “great/good” by 31% (-1pp). The survey was conducted by telephone with 2,000 voters from July 22 to 24.

The third poll selected is Datafolha, which shows Lula with 47% (-1pp) of voting intentions in the first round, followed by Bolsonaro with 29% (+2pp). The government is considered as “bad/worst” by 45% (-2pp) and “great/good” by 28% (+2pp). The in-person poll interviewed 2,556 voters between July 27 and 28.

Below is the poll selection and the monthly average:

2. Economy – The unemployment rate in Brazil was 9.3% in the second quarter, according to the government. This is the lowest rate for the period since 2015, when it stood at 8.4%. (IBGE)

It also registered a positive balance of 278,000 new formal job openings in June 2022. (O Globo)

Petrobras recorded a net income of R$ 54 billion in the second quarter, a new company record. The company announced the distribution of R$ 87.8 billion to shareholders, of which the Union should receive up to R$ 32 billion. (Poder360)

With these dividends, the central government might be able to eliminate the deficit in its accounts. In June, the positive primary balance (not including interest expenses) was R$ 14.433 billion, according to the Ministry of Economy. The market expected a deficit of R$ 39.4 billion (Valor)

The increase in inflation (IPCA-15) slowed down from 0.69% in June to 0.13% in July. The deceleration reflected the drop in fuel and electric energy prices. In 12 months, the IPCA-15 went from 12.04% in June to 11.39% in July (Valor)

Inflation measured by the General Price Index – Market (IGP-M) slowed down to 0.21% in July, from 0.59% in June. The result was better than the market estimates, of 0.30%. (Valor)

The IMF (International Monetary Fund) estimates a 1.7% growth in the Brazilian economy in 2022, against a forecast of 0.8% in April. For 2023, the projection of Brazilian growth was reduced from 1.4% to 1.1%. Bradesco also revised its 2022 GDP projection from 1.8% to 2.3%. (Valor)

The National Confederation of Goods Trade, Services and Tourism (CNC) released a report showing an increase in trade confidence of 1.5% in July, compared to June. (Valor)

3. Public Administration РThe Minister of Defence, General Paulo S̩rgio Nogueira, said he respects the Inter-American Democratic Charter. The statement was made at the opening of the 15th Conference of Defence Ministers of the Americas, in Brasilia, on Tuesday (26). (Folha)

The Federal Prosecution Service (MPF) accused the president of Funai (National Indian Foundation), Marcelo Augusto Xavier da Silva of creating illegal reports to persecute and falsely accuse some of the foundation’s staff and indigenous associations. (Folha)


1. The political trend remains positive. From an institutional perspective, conflicts have temporarily diminished. The parties’ support for the two major candidates is developing as expected and has not caused any changes in the correlation of forces in the National Congress. There has been a slight increase in popular support, possibly resulting from the economic measures to reduce fuel prices and inflation in July, the drop-in unemployment rates, and the prospect of receiving social aid. This set of factors may have contributed to Bolsonaro’s slight growth in the latest polls.

Although the average gap between Lula and Bolsonaro remains stable, Bolsonaro’s campaign has made efforts to reduce rejection among the electorate in general and among female voters. In the Southeast and Northeast, regions where Bolsonaro appears behind Lula in the polls, the situation has been changing in some states. From March to July, for example, according to Quaest, Bolsonaro shortened the distance in Bahia by 3 percentage points, Minas Gerais by 7pp and São Paulo by 11p. It may not seem like much, but if it is a trend, Bolsonaro could still grow in the polls. Despite this, Lula should continue to maintain his lead in the Northeast, and more broadly among women and young people.

In the coming weeks, Bolsonaro may suffer some wear and tear over the issue of electronic ballot boxes. The articulation in favour of the electoral system and in defence of democracy by individuals and institutional actors of great national influence puts enormous pressure on Bolsonaro to cease his criticism of the system. Nevertheless, there is also another part of society that agrees with the President’s arguments, especially those related to the STF.

On the one hand, there are good chances that Bolsonaro will remain resilient and with possibilities for growth, especially if he avoids criticism of the electoral system and refrains from attacking the STF, with chances of surpassing the 35% average in August. On the other hand, although many headlines report that Lula may win in the first round, he is still likely to drop some points in the surveys when the campaign begins. The least observed variable, however, is the support of other major parties, such as parts of the MDB and União Brasil, which are rehearsing a rapprochement with the PT candidacy.

2. The economy remains on a positive trajectory. As expected, the drop in fuel prices has generated positive effects on inflation. The job market continues to grow, both formal and informal. The real salary mass, for example, expanded 2.8% in the quarter ending in May. Besides this, there was an increase in the average salary in June of 0.68% in relation to the previous month.

3. Public management follows a neutral trend, with no significant changes.

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