Assessment of Brazilian economic policy shows positive change in the country

A recent survey conducted by Genial/Quaest indicates a significant change in the perception of Brazil’s economic policy.

In May, only 10% of the financial market believed the policy was headed in the right direction. However, in June, this number increased to 47%.

Conversely, the proportion of those who thought the policy was heading in the wrong direction dropped from 90% to 53% during the same period.

This change in sentiment is attributed to the approval of the tax reform by the Chamber of Deputies in early July.

The survey, conducted between July 6 and 10, coincided with this development, which likely influenced the respondents’ opinions.

The survey also revealed an optimistic outlook for the economy in the next 12 months.

The percentage of those expecting improvement surged from 13% in May to 53% in July, while those expecting a worsening decreased from 61% to 21%.

The expectation of the economy remaining the same remained steady at 26%.

Regarding the government’s capacity to pass its agenda in Congress, the survey showed an increase from 10% to 27%.

However, this figure is lower than the initial survey in March, where it was at 33%.

The proportion of respondents perceiving the government’s capacity as low decreased from 39% to 24%, while those who saw it as regular oscillated from 51% to 49%.

The survey also asked about the main obstacles to improving the economy.

For 45% of respondents, the lack of a functioning fiscal policy was identified as the primary hindrance.

Other factors mentioned included low education and productivity of the population (21%), electoral interests (19%), high interest rates (11%), fear of inflation (1%), and high unemployment (1%).

In terms of Brazil’s international image, 51% of respondents believed it had improved since President Luiz Inácio Lula da Silva took office, while 29% considered it unchanged, and 20% believed it had worsened.

Expectations of increased foreign investment in the country rose from 26% in May to 54% in July, while expectations of stability decreased from 51% to 39%, and expectations of a decrease dropped from 23% to 7%.

The survey involved 94 interviews with investment funds based in São Paulo and Rio de Janeiro, including managers (47%), economists (31%), traders (14%), analysts (5%), and others (3%).

Regarding tax reform, the majority of the market expects it to stimulate job creation and improve industry results, but it is anticipated to have a negative impact on the trade and services sectors.

The survey found that 66% believe tax reform will enhance people’s well-being, while 34% anticipate a decrease.

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