The Week Ahead in Brazil #118

1. Politics – The main candidates in the dispute for the Presidency of the Republic were invited for interviews on Jornal Nacional. On Monday (23), the interviewee was Jair Bolsonaro (PL); on Tuesday (23), Ciro Gomes (PDT); on Thursday (25), Lula (PT); and on Friday (26), Simone Tebet (MDB) is expected. (g1)

On Sunday (28), at 9 pm, the first debate between candidates will be held. The event is promoted by Band, TV Cultura, UOL and Folha de São Paulo. Lula and Bolsonaro have not yet guaranteed their presence. (Poder360)

The free radio and television time for the first round of elections begins this Friday (26) and runs until September 29.

Following an order from Justice Alexandre de Moraes, from the Federal Supreme Court (STF), the Federal Police (PF) launched a search and seizure operation against eight businessmen who said they preferred a coup to the return of the PT in a WhatsApp group. They are supporters of President Jair Bolsonaro (PL) and had their accounts on social networks blocked, as well as their bank and telematics secrets broken. (CNN)

The president of the Superior Electoral Court (TSE), Alexandre de Moraes, met with the Minister of Defence, Paulo Sérgio Nogueira. The ministry evaluated that the meeting was “positive”, as it opened a dialogue around the proposals presented by the Armed Forces for changes in the electoral system. (Valor)

The latest FSB/BTG survey shows Luiz Inácio Lula da Silva (PT) leading the voting intentions in the first round with 45% (stable), followed by Jair Bolsonaro (PL) with 36% (+2pp). The government is considered as “bad/worst” by 45% (+1pp) of the population and “great/good” by 34% (+1pp). The disapproval rate is 56% (+1pp) and the approval rate is 38% (stable). The survey was conducted by telephone with 2,000 voters from 19 to 21 August.

2. Economy – The government released the August inflation forecast, the IPCA-15. According to IBGE, the country registered deflation of 0.73% for the month, the highest since the IPCA-15 was created in 1991. (Valor)

Petrobras announced a 10.4% reduction in the price of aviation fuel at refineries. At the beginning of August, the company had already reduced the price by 2.6%. (Poder360)

The Federal Revenue Service informed that the federal government’s collection of taxes, contributions and other revenues reached R$ 202.6 billion in July. The amount represents 7.47% more than the same month in 2021, and the highest ever recorded for July since the beginning of the series, which began in 1995. (g1)

Brazil recorded a current account deficit of US$ 3.506 billion in May. In the same month of 2021, the current account balance was positive by US$ 2.501 billion. In the accumulated 12-month period, the difference between what the country spent and what it received in international transactions. The Central Bank expects a surplus of US$ 4 billion in 2022. (Valor)

The Brazilian trade balance registered a surplus of US$ 42.19 billion until the third week of August, receding 15.4% in relation to the result of January to August 2021, by daily average. The trade flow in the period increased by 24.1%, in the same comparison, reaching US$ 387.25 billion. (Brazil)

3. Public Administration – The government has published a decree increasing the Tax on Industrialized Products (IPI) of 109 products to maintain the competitiveness of the Manaus Free Trade Zone. (Valor)

The Ministry of Justice informed that Facebook was sentenced to pay a fine of R$ 6.6 million due to the leak of data from Brazilian users. The case refers to the transfer of data to Cambridge Analytica, in 2018. (Valor)

Justice Cármen Lúcia, of the Supreme Court (STF), took office as the titular minister of the Superior Electoral Court (TSE). Appointed by TSE president, Justice Alexandre de Moraes, she will act as judge of electoral propaganda during the campaign. (Valor)

An analysis:

1. The political trend remains positive. There was no change in the government’s approval ratings, and the parliamentary support base also continues without significant changes. The most sensitive aspect continues to be the level of institutional conflict, which seems to be resisting the tensions of the week with Moraes’ decision on businessmen sympathetic to Bolsonaro. The decision drew criticism for the judiciary from various segments of society. Bolsonaro, however, did not escalate the situation to blunt criticism of Moraes or return to the issue of the electoral system. This new, more moderate version of Bolsonaro, seen in his interview with Jornal Nacional, does not make him lose votes and may bring him others in the coming weeks. His political allies are happier with his performance.

There was criticism of William Bonner and Renata Vasconcellos’ conduct of the interviews with Bolsonaro and Lula. Bolsonaro supporters claimed that the journalists cut the candidate off much more than usual and that they were biased in the assumptions of their questions. There was also criticism of the “soft” way both journalists reportedly treated Lula. The most natural conclusion is that no candidate gained votes from the interviews, but Lula may have made some image gains at the margin. The start of the election campaign should better punctuate electoral differences and narrow the gap between Lula and Bolsonaro.

2. The economy stays on a positive trend. The August inflation forecast came in better than expected, largely due to a drop in transport prices. With this, the IPCA-15 slipped from 11.4% in July to 9.6% in August.

3. The public administration continues a positive trend. Overall, the decisions made by the executive branch are proving to be correct. Nonetheless, there is still room for improvement in some sectors, such as the environment and education. Both from the perspective of public policies and the public actors involved in the process, the functioning of the public administration has improved compared to previous months.


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