In respect of Brazilian politics, we watch daily
degrading extravaganzaoin the several Brazilian institutions’ "stages".
Economically, and with some surprise, the situation remains serene and
fortunately there isn’t a pernicious influence of politics on the economy . In
fact, growth prospects are moderately optimistic.
What is the reason for this situation? A large
part of this phenomenon is due to excess liquidity in the global economy and
the attraction of foreign investors to risk. As long as there is no worsening
of financial conditions, the recovery of economic activity will continue, even moderate.
As a matter of fact, what is happening is that
money doesn’t stop entering Brazil. Foreigners are much more optimistic than
the Brazilians themselves, since for now, they believe there is a process of
stabilization of the companies that is still going on and they have already
adapted the operation and the costs to the new economic reality. Some companies
inclusively are already generating profits.
According to some economists, this stability is
based on the confidence of foreign investors in the current Brazilian economic
team, which has been enjoying the market's sympathy. This scenario was far from
being a reality in Dilma Rousseff's time.
Nevertheless, what explains better current
situation in which the market has not reacted to the successive political
crises, is the international environment, where global growth (Europe, Japan,
USA), has shown itself.
Those who survived the beginning of the crisis
were able to adjust financially to the moment and are taking advantage of the
favorable international scenario, to produce more and to replenish stocks
without increasing the cost base.
In short, regardless of the political crisis,
the world conspires in Brazil’s favour.
Miguel Verde - Senior Consultant, Professor of
International Relations
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