After a rocky Friday for Brazilian markets — following the country’s latest institutional crisis and rumors of a possible exit of Economy Minister Paulo Guedes — Mr. Guedes attempted to calm investors on Monday morning, reaffirming his trust in the Brazilian economy.
That, combined with news that House Speaker Rodrigo Maia does not plan to open impeachment proceedings against President Bolsonaro during a pandemic, helped appease the market’s craving for good news. By 2 pm, the Ibovespa stock market index was up by 3.45 percent, though still not enough to mitigate Friday’s losses.
Mr. Guedes said that private investments will help push the Brazilian economy out of its slump, stressing there is no need for the government to breach its federal spending cap. Both statements go against a stimulus program based on infrastructure investments submitted last week by Chief of Staff Walter Braga Netto, and a new provisional decree making it easier for companies to borrow money from public banks.
Market expectations for the GDP in 2020 measured weekly by the Central Bank dropped for the 11th straight week: from -2.96 to -3.34 percent.
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