Breathing in the economy gives a second chance to Lula’s 1st year – 06/07/2023 – Bruno Boghossian

Lula prepared himself for a tough first year in the economy. Before going up the ramp, the petista ran after extra oxygen and negotiated a turbocharged government spending. At the same time, he started a war with the Central Bank to try to circumvent the tightening of interest rates.

The start of the mandate was one of apprehension in the Plateau and in the Farm. The fear was that frustration with the economy would rub off on an electorate who had heard promises of an almost instantaneous recovery. Now the mood in these offices has changed.

Lula’s team does not expect a miraculous bonanza, but it believes it will cross 2023 with a breath of fresh air. A relief in prices, the bet on cutting interest rates, the effect of social expenses and a good dose of luck could allow the PT to end the year with good political dividends.

A slice of optimism is due to external factors. The rise in food production and lower international demand held down the prices of products that affect voters’ well-being. Fuels and the dollar under control complete the package of falling inflation and make an interest rate cut inevitable.

The quagmire is still ugly because production and employment are slipping, but some government lifebuoys (Bolsa Família, Desenrola, minimum wage) may offer a slightly less painful survival for the poorest, in particular.

Lula will not waste the chance to make his mark. She must link the possible comfort of the voter to the government programs and beat the drum for a drop in interest rates (even if she has not actually doubled the BC).

The scenario is in the account of investors who, little by little, soften the discourse that Lula 3 will produce misfortunes from beginning to end. The next reflection may appear in the political world, which is usually open to rulers on sunny days.

The forecast has improved for the first half of the term, but the following years depend on an increase in investments and some reform. The sirloin steak seems guaranteed, but Lula needs to go after the sirloin steak.

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