Government sends 2023 Budget, unemployment declines and what matters in the market

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The government budget for 23

The Jair Bolsonaro government (PL) presented this Wednesday its Budget proposal for 2023 with an average benefit of BRL 405 for Auxílio Brasil, below the current floor of BRL 600which runs until December of this year.

An unusual message forwarded with the project contains Bolsonaro’s promise to seek the resumption of the R$ 600, but without detailing how this will be done. Understand here the comings and goings of the social benefit in the government.

What explains the reduction? The spending ceiling, a rule that limits the advance of expenses to inflation. There is no room in the mechanism to maintain the aid of R$ 600, whose increase of R$ 200 has a cost of BRL 52.5 billion.

• were reserved BRL 105.7 billion for the Auxílio Brasil program, enough to pay the minimum wage of R$ 400 to 21.6 million families.
• Congress will control through parliamentary amendments R$ 38.8 billionwhich represents 73% of the R$ 52.5 billion needed to expand the aid.

Other important Budget figures:

• Disclaimers: the government maintained the cut in federal taxes on fuel, applied this year to contain the rise in items. The revenue that will no longer enter the coffers reaches BRL 52.9 billion in the year.

Unemployment declines, income recovers

The unemployment rate in Brazil fell to 9.1% in the quarter ended in July, while the income of workers returned to have a significant increase after two years, informed the IBGE this Wednesday (31).

In numbers: The result came close to the median projected by the market (9%) and is the lowest since the quarter that ended in October 2015.

• The total number of unemployed (without work, but looking for a vacancy) dropped to 9.9 millionlowest level since 2016.

• The number of people engaged in some kind of work reached 98.7 milliona series record since 2012.

What explains: the recovery of the labor market is observed both in informality and in CLT contracts. It comes on the heels of the post-pandemic reopening of activities and is also helped by the government’s fiscal stimulus, which heats up consumer demand.

Income recovers, but…The average real yield in the quarter ended in July reached BRL 2,693, 2.9% above that verified from February to April.

• The truce in inflation from May to July helped lift labor income, which is adjusted by the price index.

• Still, she’s 2.9% below the level recorded in the same period of 2021 and the level is the second lowest in the series for the quarter through July.

More on the job market:

Congress passed a measure that allows the division of the extra 60 days of maternity leave between mothers and fathers, as long as both work in companies that participate in the Empresa Cidadã program.

Gringos contribute to the 2nd best month on the stock exchange

Boosted by foreign currency, the Brazilian stock exchange ended August with a high of 6.16%in the second best month of the year –behind January’s 6.98%.

This Wednesday, however, the bitterness outside contaminated the Ibovespa, which retreated 0.82%, at 109,522 points. The dollar rose 1.76%, the BRL 5.20.

in numbers: foreigners put BRL 18 billion in the Brazilian stock market this month, in a partial balance of August raised by TradeMap.

• It was the best month in the second semester, but still behind the BRL 23 billion that entered the first quarter, when commodities set the tone.

What explains: raw materials are not as heated as they were at the beginning of the year, but Brazil’s current differential in relation to other markets is in the cycle of high interest rates.

The performance of the main indices abroad in August reinforce the diagnosis. In the US, S&P, Nasdaq and Dow Jones fell by 4.2%, 4.6% and 4.1%, respectively. In Europe, London dropped 1.88%.

Payday: despite the drop in the Ibovespa this Wednesday, the most traded shares of Petrobras rose 2.47% on the day the first installment of the record dividends referring to the second quarter results was paid.

Green hydrogen from ethanol at USP

A partnership between USP (University of São Paulo), Shell Brasil and Raízen intends to develop a technology to transform ethanol into green hydrogen, which will be tested in buses at Cidade Universitária.

Understand: due to its low carbon emission, green hydrogen has become one of the fuels of the future in the face of the current energy crisis. The gas is used in the transport, steel, chemical and electricity generation sectors.

• Most hydrogen generation projects tend to adopt a chemical process – electrolysis – which uses an electrical current to separate hydrogen from oxygen in water.

• The difference with green hydrogen is that the energy source is clean, usually solar or wind. The technology is still in its infancy, because transporting the fuel is complicated.

The project: the partnership model is different from the more traditional ones when using ethanol. The idea is to develop a device called a reformer, which breaks the biofuel molecule to turn it into hydrogen.

• It will start from an existing prototype of the Hytron company, which is also part of the partnership, as well as Senai’s innovation arm in biosynthetics and fibers. The start of operations is scheduled for 2023.

• The project foresees the installation of two factories on the USP campus, already thinking about a model that is easy to be replicated in other places, such as gas stations – which would mitigate the problem of transporting hydrogen.

• The biofuel will be supplied by Raízen, the world’s largest sugarcane ethanol producer. Shell, which has invested in low carbon technologies around the world, will put BRL 50 million In the project.

Other initiatives: at the end of July, Unigel announced its plan to build a green hydrogen plant in Camaçari, Bahia, with an initial investment of US$ 120 million and which will use renewable electrical energy in electrolysis.

• Due to its potential for generating clean energy, Brazil is considered a promising market for the production of green hydrogen.