Market shows concerns as economy shifts into ‘election mode’

Financial analysts are becoming even more skeptical of the Bolsonaro government amid a series of crises, and risk abandoning the president before next year's election

Market shows concerns as economy shifts into 'election mode'
President Jair Bolsonaro has one priority: boosting his re-election chances. Photo: Isac Nóbrega/PR

Amid the president’s dwindling popularity, anemic Q2 GDP results, and market perception of widespread economic downturn, the Brazilian government submitted its 2022 budget bill to Congress on Tuesday. As expected, the proposal was less political and does not indulge far-right President Jair Bolsonaro’s demands for the 2022 election — which had been a major concern for the Brazilian financial sector.

However, with its use of outdated economic parameters and the lack of a solution regarding the government’s court-ordered IOUs — known as precatórios — the proposal was not enough to tranquilize the markets, which are agitated by...

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