Good morning! Today, how Brazil’s energy outlook is a sigh of relief for the government. The latest pro-Bolsonaro onslaught against the Supreme Court. And Central Bank workers back on strike.
Energy crisis no longer a threat
Brazil is about to enter its dry season, but energy shortages are no longer threatening President Jair Bolsonaro’s re-election prospects. Only in 2006 and 2010 were hydroelectric reservoirs at higher levels before a presidential election this century.
Why it matters. The 2020-2021 summer was the driest in 100 years and pushed Brazil to the brink of an energy crisis similar to one the country experienced in 2001. Back then, homes and companies were forced to save power — measures which negatively impacted the GDP by 3 percentage points.
- Such a crisis is poison for politicians seeking re-election.
Tariffs. In 2021, the government hiked utility bills on multiple occasions to finance energy supply from thermal plants to replace ailing hydroelectric reservoirs. These new tariffs ended in mid-April in order to ease inflation on Brazilian households.
- Still, energy inflation remains rampant and bills have become 28 percent more expensive over the past 12 months.
- Experts believe there is little the government can do at this...