BTG CEO rules out ‘barbering in the economy’, regardless of who wins election

BTG Pactual Chief Executive Roberto Sallouti said this Thursday (15) that his base case considers that there will be no “barbershop” in the economy, regardless of who wins Brazil’s presidential election in October.

“Fortunately, we reached a minimum consensus on what can and cannot be done in the economy, so whatever the candidate, we think there will be no barbering in the economy, this is the base scenario”, he said. at the Women Invest Summit, in São Paulo, aimed at women investors.

He pondered that, if there is a change of power, it is necessary to see if it will be exactly that and who will be appointed as Minister of Economy.

“(From) one candidate we know who will be (the minister), from the other we do not know. Now, our experience, the signs that are being passed, lead us to believe that.”

Sallouti noted that, for the first time in an election, volatility in the Brazilian market is being caused more by the external scenario, although he does not rule out “some noise” because of the election.

He assesses that the United States should still have strong interest rate hikes and that the rate at the end of the cycle will be higher than expected, while the fall afterward will take longer than expected.

In relation to Europe, the executive drew attention to the “galloping inflation and very serious energy crisis”. He estimated that the European Central Bank will need to raise interest rates sharply, which, with the energy crisis, should trigger a recession.

“Everyone says that inflation, whether European or American, is supply inflation. Sorry, it’s not true. It’s partly supply, but it’s also a lot of demand inflation, especially in services, just look at the unemployment, which are at minimum,” he said.

He added that for inflation to return to the level of 2%, there will be suffering, and that suffering will be through unemployment.

Sallouti also highlighted the situation in China, which, according to him, is experiencing its “Lehman Brothers” moment with the crisis of the real estate development company Evergrande, which is contaminating the sector, undermining confidence in the construction sector.

This, according to him, coupled with the lockdows, the Covid zero policies, are driving Chinese growth very low. He said that in the last 20 years there was always a thought about when there would be a crisis in China and the country always managed to solve it, and that the base scenario is that it will happen again.

“But it’s worth following up, because there may still be a surprise.”