Good morning! Today, we talk about the state of Brazil’s state races. Better GDP prospects. And why most of the presidential succession line will leave Brazil.
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GDP expectations keep going up and up
The Independent Fiscal Institution (IFI), a think tank operating under the Senate’s umbrella, issued new estimates for the economy. It raised yearly GDP growth expectations from 2 to 2.6 percent — adding that it could raise growth expectations for 2023 from 0.6 to 1 percent if stimuli are kept throughout next year (which both presidential frontrunners promise to do).
Growth coming. The Central Bank’s economic activity index (IBC-Br) went up by 1.17 percent in July — well above market expectations. It could make analysts become even more bullish about second-half growth.
- Just minutes ago, the Economy Ministry raised GDP expectations from 2 to 2.7 percent.
Yes, but … “In this scenario of greater stimulus, it is assumed that the greater fiscal risk will elevate risk premiums for Brazil and inflation expectations,” IFI says.
Fiscal situation. In the 12...