One of the main fund managers in the Brazilian market, Luis Stuhlberger, CEO of Verde Asset, sees both good and bad news regarding the evolution of the country’s macroeconomic scenario during the last few months.
On the positive side are the growth of GDP (Gross Domestic Product) this year above what economists initially projected, the growing long-term investments promoted by the private sector and the fall in unemployment.
On the negative side, what the manager evaluates as populism of the political class is one of the main points of concern.
“What is more worrying on the bad side is that we have been held hostage by populism”, said Stuhlberger, during participation in an event organized by Anbima and B3 this Tuesday (20th) in São Paulo.
According to the manager, fiscal austerity and the spending cap “practically became Brazil’s number 1 public enemy”, in a scenario in which President Jair Bolsonaro (PL), as well as Congress more broadly, approved assistance measures. on the eve of the election.
“Everyone in the system, Executive, Legislative, Judiciary, understands that the ceiling is a very bad thing. That’s a shame,” said Stuhlberger.
He added that, to the extent that the Bolsonaro government has increased the level of spending since the middle of last year, resulting in an improvement in economic growth and a reduction in unemployment, the populist policy is gaining support among the population in a different way. general.
“We are going to enter, especially if former President Lula wins the election, in a spirit that spending more is better for Brazil,” said the Verde manager.
Lula’s signals for education are a repetition of mistakes that have already been made, says manager
Stuhlberger also criticized recent signs by the PT candidate that, in an eventual third term, he will prioritize student funding through programs similar to those adopted in previous administrations, such as Fies (Student Financing Fund).
“Brazil’s desperate need is to improve the quality of teaching of the so-called K12” [expressão americana que se refere ao ensino primário e secundário nos Estados Unidos]. “In other words, we can already see that, right away, you intend to make mistakes that have already been made.”
He also stated that the country has “a contracted hole for 2023 of 1.5% to 2% of GDP, in primary. It is no small thing.” The increase in taxes is a possibility that should be discussed starting next year to resolve the situation, said the expert.
Stuhlberger also stated that Brazil is heading towards spending around 37% of GDP (Gross Domestic Product) in 2023, without considering the possibility of increases in the minimum wage and the civil service, and with the maintenance of Auxílio Brasil at R$ 600. The expected tax collection is around 36% of GDP.
“We are in a dangerous scenario, although I think that this danger will not materialize in the next 12 months.”
Verde Asset’s CEO also said that the stock exchange’s reaction to an eventual confirmation of the PT’s victory must be positive, “because I don’t believe in him being radical or anything like that. [a serem adotados pelo governo do PT] will come over time.”
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