Economic optimism ticks down, taking Lula’s approval rates with it

Unemployment rates in Brazil are at their lowest since 2015. The inflation dragon seems to have been slain (at least in its worst form). A federal program helped millions renegotiate their liabilities. And yet, Brazilians are growing less optimistic about the country’s economic outlook.

A new poll shows that 50 percent of Brazilian voters believe the economy will improve in the short term, down from 59 percent in August. Those who say the economy worsened in the last 12 months jumped from 23 to 32 percent. The data suggests voters may already be feeling the effects of the economy’s loss of steam in Q3.

Multiple economic bellwethers suggest Brazil will not repeat the much better-than-expected GDP numbers it saw in the first two quarters of the year. Retail sales are down, the services sector is performing worse, and the Central Bank’s economic activity indicator dropped.

While not a base scenario, some analysts believe it is not impossible for Brazil to see a technical recession this year, with negative growth in Q3 and Q4.

The timing for this economic slowdown is far from ideal for the government, as President Luiz Inácio Lula da Silva is already starting to see his popularity erode. A poll by Quaest shows a decline in Lula’s approval rating, from 60 percent in August to 54 percent now. His rejection rate, meanwhile, jumped by seven points to 42 percent.

Brazilian presidents are only as popular...