Uncertainty in the economy decreases with expectation of reform vote

Uncertainties about the Brazilian economy are at their lowest level since November 2017, according to the Brazilian Institute of Economics of the Getulio Vargas Foundation (Ibre/FGV). Expectations of the vote on the tax reform in the Senate and on the fiscal framework in the Chamber are contributing to this scenario.

“In general, the drop in recent months is related to the improvement in the prospects for the country’s macroeconomic scenario, with a reduction in fiscal and political uncertainties. The continuity of this picture will depend both on the recovery of economic activity and on the maintenance of a collaborative and synergistic relationship between the spheres of government”, says Anna Carolina Gouveia, economist at Ibre/FGV.

Lucas Assis, an analyst at Tendências Consultoria, also points out that there are signs of confidence in the long term. He points out that another of the main thermometers of this is the beginning of the downward cycle in the Selic, promoted by the Monetary Policy Committee of the Central Bank (Copom) on the 2nd. The rate fell from 13.75% to 13.25% per annum. “The reduction in interest rates is associated with lower chances of a more pessimistic scenario prevailing”.