Faria Lima’s perception of economic policy improves – 05/10/2023 – Market

The perception of financial agents about the work of the economic team of the government of Luiz Inácio Lula da Silva (PT) and about the perspectives for the GDP (Gross Domestic Product) has improved over the last few weeks.

Research by Genial Investimentos and the research firm Quaest showed that investors who evaluate the work of the Ministry of Finance led by Fernando Haddad as positive increased from 10% in March to 26% in May 2023. as negative went from 52% to 37% in the same period.

The survey also showed that 10% of those interviewed responded that the government’s economic policy is in the right direction, compared to 2% in the previous survey. The percentage of those who see economic policy in the wrong direction has dropped from 98% to 90%.

Additionally, 13% said the economy should improve over the next 12 months, up from 6% in March. Already those who say they believe that the economy should get worse ahead fell from 78% to 61%.

Regarding the risk of the country entering a recession, 60% said they do not expect this scenario, compared to 27% in the previous survey. Those who still believe that the Brazilian economy will go into recession went from 73% to 40%.

Questioned whether the government’s fiscal policy will generate public debt sustainability, 13% said yes, compared to 10% in March, and 87% do not have this hypothesis, compared to 90% in the previous survey.

Regarding foreign investments in Brazil in the coming years, the percentage of those who expect them to increase was from 20% to 26%. Those who expect foreign investment to fall fell from 42% to 23%.

The survey was carried out between the 4th and 8th of May and heard 92 fund managers in São Paulo and Rio de Janeiro.

For 34%, the start of the interest rate cut should happen in August

Regarding the monetary policy conducted by the BC (Central Bank), 91% considered that the monetary authority’s decision to keep the Selic rate stable at the current level of 13.75% per year was correct. In March, it was 95%. Those who considered the decision wrong went from 5% to 9%.

For 34% of respondents, the interest rate cut cycle should start in August. For 25%, the Selic reduction will start in September, and 20% expect the first decrease only in November. Another 12% say they believe that the Selic does not start to fall this year.

The financial agents consulted understand that the ideal Selic rate for Brazil today is 12.47% per annum, compared to the 12.86% indicated in the March survey.

Tarcísio de Freitas should be the main name of the opposition

The survey also asked who will be the main leader of the opposition to the Lula government in the next four years. The governor of São Paulo, Tarcísio de Freitas (Republicans), appears in the lead, with 48%, followed by former president Jair Bolsonaro (PL), with 34%.

If Bolsonaro cannot run in the next elections, 66% of those interviewed believe that he should indicate his support for the current governor of São Paulo, while 25% pointed to the name of the governor of Minas Gerais, Romeu Zema (Novo).

And 55% of those who responded to the survey did not say they believe that in 2026 there will be a viable candidate who is not linked to either President Lula or Bolsonaro.