Bolsonaro and Guedes campaign with good news in the economy

President Jair Bolsonaro (PL) has been trying to capitalize on the favorable news in the economic area in recent days in search of votes a month away from the elections. In second place in the voting intention polls, he tries to reduce the advantage of Luiz Inácio Lula da Silva (PT), especially in the low-income electorate.

This week, the government celebrated data such as GDP (Gross Domestic Product) higher than expected in the second quarter, the drop in unemployment, the rise in workers’ income and a new round of fuel price cuts announced by Petrobras.

Bolsonaro’s ministers took advantage of the wave of good news to flood social networks with messages celebrating the disclosures, after the government suffered a negative period in the economy, especially high and resistant inflation in the first half, driven by food and the successive increases in food prices. gasoline and diesel.

One of the turning points has been the job market. The unemployment rate is falling, after reaching double digits at the beginning of the year. The average real income of Brazilian workers, in turn, grew again, although it is still 2.9% lower in the quarter ended in July compared to the same period last year, according to the IBGE.

Another good news for the government was the GDP result, released this Thursday, which showed an increase of 1.2% in the second quarter – a percentage that positively surprised the market and led to a wave of upward revisions to the 2022 result.

Also on Thursday, Petrobras – which has been intensifying fuel cuts announcements, including products whose readjustments were not widely publicized – cut the price of gasoline by 7%. Bolsonaro posted the cheapest fuel price on his social media minutes later.

In the same vein, Caixa announced this week the expansion of financing for the Casa Verde e Amarela housing program, and the Ministry of Citizenship is preparing to include another 804,000 families in the turbocharged Auxílio Brasil.

“Brazil growing above expectations and surpassing G7 countries (OECD). Inflation lower than the USA and Germany (IPCA). Unemployment falling (Caged). High investments (Central Bank),” Bolsonaro said in a social network this Thursday ( 1st). “There are no arguments against facts. Let the ‘but’ begin”, he added, referring to the analyzes that ponder the positive data.

The Ministry of Economy also celebrated the numbers. After spending years commenting on the GDP result only through notes, the ministry decided to convene an interview with journalists so that the technicians could praise the results.

“If in the second quarter, with real interest at peak, we grew 1.2%, the economy has the strength to grow even more when these factors ease”, said the head of the Special Advisory for Economic Studies, Rogério Boueri.

The technicians still minimized the impulse of atypical measures this year, such as the extraordinary withdrawal of the FGTS (Fundo de Garantia do Tempo de Serviço) – which increased GDP by 0.09 percentage point in government accounts.

Minister Paulo Guedes (Economy) echoed the speech praising the strength of the Brazilian economy and repeated this Thursday that the country is “doomed to grow”.

“What was an optimistic forecast for the entire year, which was to grow 2%, has already been surpassed in six months”, he celebrated. “If [o Brasil] not grow anything from here until the end of the year, it already has, what we call ‘carry’ [carrego]a growth of 2.4%”, he added.

The enthusiasm has led the government to put aside analysts’ fears about the risks to public accounts in 2023, after the flood of resources released on the eve of the elections to cut fuel taxes, increase social benefits and create aid for truck drivers and taxi drivers. —and which should largely continue.

Guedes relativizes saying that there is “no fiscal bomb” for next year.

Juliana Damasceno, senior economist at Tendências Consultoria, believes that the good news is being much more motivated by an extraordinary revenue shock, and that a withdrawal of conjunctural aid would be painful for economic activity.

“The good news is so limited that, even without the fiscal bombs included in the Budget, there is a forecast of a deficit for next year”, she says, referring to the deficit of R$ 63 billion foreseen by the government for 2023 – without considering a possible increase from R$400 to R$600 in Auxílio Brasil, as Bolsonaro promises.

“The Ministry of Economy and the SPE [Secretaria de Política Econômica] argue that fiscal consolidation is taking place, when in fact there is no real effort in that direction”, she says.