Growing optimism in the Brazilian economy

After years of crisis, economists finally seem to be getting more optimistic about the future of the Brazilian economy.

In recent weeks, Brazil’s 5-year Credit Default Swaps (CDS)—commonly called the country’s “risk level”—has gone down to its lowest level since 2013, before the country fell into what was to be its worst recession on record. This “score” reflects an overall perception that the Brazilian economy is set to get better. 

And all of this despite the recent political turbulence involving President Jair Bolsonaro and his sons. In the perception of financial pundits, the head of state’s outrageous statements will not rock the agenda of reforms. There is reason to believe this is true. Last week, Congressman Eduardo Bolsonaro argued that his father should bring back decrees created by the dictatorship to persecute their political opponents—including the infamous AI-5, an institutional order giving the president the power to shut down Congress, impeach opponents at will, and eliminate political rights.

House Speaker Rodrigo Maia released a statement condemning the words of the young Bolsonaro, as did other prominent public figures, but that was it. So far, the political establishment has avoided a full-scale confrontation...