The Week Ahead in Brazil #125

What is happening in Brazil?

1. Politics – President Jair Bolsonaro (PL) said on Sunday (9) that he may evaluate an increase in the number of ministers at the Supreme Court (STF) if re-elected. Vice President Hamilton Mourão also defended a higher number of ministers in the STF. (Poder360)

The Ipec/Globo poll shows Lula (PT) has 55% of valid vote intentions, followed by Bolsonaro (PL) with 45%. In total votes, Lula has 51%, against 42% (-1pp) of Bolsonaro. Blanks, invalid votes, and undecided add up to 7%. The survey was carried out in person with 2,000 voters from 8 to 10 October (Valor)

The Ipespe/Abrapel survey shows Lula (PT) with 54% of valid votes and Bolsonaro (PL) with 46%. In total votes, Lula has 50% and Bolsonaro 43%. Blanks or nullified votes and those who do not know who to vote for add up to 6%. The survey was conducted by telephone with 1,100 respondents between 8 and 10 October.

The PoderData survey shows Lula (PT) with 52% of valid votes and Bolsonaro (PL) with 48%. In total votes, Lula has 48% and Bolsonaro 44%. Blanks, null and undecided add up to 8%. The survey was held by telephone, with 5,000 voters, between October 9 and 11 (Poder360)

Quaest/Genial indicates Lula (PT) with 54% of the valid votes and Bolsonaro (PL) with 46%. Lula has 49% of the total votes, and Bolsonaro (PL) 41%. Blanks, nulls, or undecided add up to 10%. The poll was conducted face-to-face with 2,000 voters between October 10 and 12.

AtlasIntel showed Lula (PT) with 52.4% of the valid votes and Bolsonaro (PL) with 47.6%. In total votes, Lula has 51.1% and Bolsonaro 46.5%. Blanks, null and undecided add up to 2.4%. The survey was conducted with 4,500 respondents digitally between 8 and 12 October.

DataFolha points Lula (PT) with 53% against Bolsonaro’s 47%. The institute heard 2,898 voters between 13 and 14 October.

Source: prepared by the author from the original polls. Valid votes.

Band TV will host a presidential debate between Lula and Bolsonaro today (16) at 8pm.

2. Economy – The official inflation (IPCA) registered deflation of 0.29% in September, the third consecutive month of decline. In the 12 months that ended in September, inflation stood at 7.17%. (Estadão)

Brazilian Central Bank’s Focus Bulletin presented a new reduction in market projections for inflation in 2022, from 5.74% to 5.71%. The forecast for 2023 remained at 5%. (Estadão)

Petrobras announced a 5% reduction in the price of natural gas for distributors. The measure is effective from 1 November 2022 to 31 January 2023. (Brasil)

Brazilian trade flow increased 25.4%, reaching US$13.53 billion, with a US$1.60 billion surplus in the trade balance in the first week of October 2022. The accumulated trade balance for the year showed an excess of US$ 49.32 billion, and the trade flow recorded an increase of 22.8%, reaching US$ 473.17 billion. (Brasil)

3. Public administration – The government has authorized 12 banks to offer payroll loans through Auxílio Brasil as of Monday (10). The loans may be paid in up to 24 months, with an interest limit of 3.5% per month. Caixa Econômica Federal (CEF), a government bank, lent R$ 111.8 million on the first day of operation of the new type of loan. (Brasil)

Justice Alexandre de Moraes, the president of the TSE (Superior Electoral Court), decided to bar the opening of investigations opened by the Federal Police and by the Cade (Administrative Council for Economic Defense) to investigate research institutes. (Folha)

How to read it?

1. The trend for politics remains positive. Bolsonaro has created institutional noise with a declaration on a possible increase in the number of STF judges and has harshly criticized Justice Alexandre de Moraes. The press gave prominence to the issue, and allies feared negative repercussions in the search for the centre voter. According to the most recent polls, the presidential coalition remains without significant changes, and the government’s approval ratings are stable at around 40%.

Despite the critical support of governors and elected legislators for Bolsonaro, polls show Lula well ahead in voting intentions, with an average gap of 7 percentage points. Even AtlasIntel, the institute closest to the result of the first round, shows a gap of 4.8pp. The electoral debates and the candidates’ agendas may show some variation next week.

It’s important to note two points: firstly, never has a candidate who came second in the first round of the presidential race won the election; secondly, never has a democratically elected president who is running for re-election since the Cardoso administration lost the re-election. This election is atypical; its result will mean breaking one of these two paradigms.

2. The economy continues a positive trend. Inflation continues to show signs of retraction, below market expectations. The impact still results mainly from tax adjustments and fuel prices.

3. The public administration continues in a neutral trend. The decision to authorize consigned loans to beneficiaries of the Brazil Aid cash transfer programme may mean some help to those who need credit and do not have access to loans. Nevertheless, there was criticism about the measure: it may have an electoral nature and harm beneficiaries in the long run.

The issue involving electoral surveys shows that the Brazilian Administration works with checks and balances but brings a lot of insecurity and confusion to the private sector.

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