Happy Friday! Today, we talk about the risks facing the Brazilian economy in the remainder of the year. Jair Bolsonaro’s latest move to please the business community. And the president’s defeat at the Supreme Court.
Pitfalls for the Brazilian economy
There was an old adage about the Brazilian economy that said “when the U.S. catches a cold, Brazil gets pneumonia.” Now the same certainly applies to China, Brazil’s largest trading partner by some distance. As a result, Brazilian economists are worried about how turbulence in the world’s top two economies may affect business at home.
- The U.S. economy shrank 1.4 percent in Q1. And while the numbers don’t tell the full story about where the country is headed, they added to recession fears currently bothering Americans. Fear alone can lead people to act in ways that hurt the economy.
- Meanwhile, China’s zero-Covid policies are affecting Brazilian exports, as finance reporter Ana Ferraz wrote. Shanghai may be heading into a less strict lockdown, but Beijing and e-commerce hub Hangzhou are scrambling to avoid their own shutdowns.
Meanwhile … The Brazilian currency has lost momentum, after a stellar performance at the beginning of the year. A constant institutional crisis and election...