Optimism with the economy hits record of the Bolsonaro government

The percentage of voters who think that the country’s economic situation has improved in recent months equals the best moment of the Jair Bolsonaro (PL) government, and positive expectations for the coming months are the highest since the beginning of the president’s term, according to Datafolha search. The survey, carried out between the 20th and 22nd, also shows the highest rate of those who consider that the personal situation has improved since the beginning of the series, in 2015.

The country’s economic situation has become more favorable in recent months for 3 out of 10 voters (27.8%), the same rate measured before the pandemic, in December 2019, and the feeling of improvement has also been increasing over the second half of the year. In August, 25% saw the trajectory of the Brazilian economy in a positive light, and 15% thought so in June.

This optimistic perception, on the eve of the elections, is greater among men (35%), those with more years of schooling (35%) and the richest — with a family income above ten minimum wages (46%).

President Bolsonaro’s voters have a more optimistic view of the economy — 64% see an improvement, compared with 59% of those who felt that way on Aug.

Of those who intend to vote for former president Luiz Inácio Lula da Silva (PT), 7% think that way now, the same level as last month. The positive perception rose, above all, among the voters of Simone Tebet (MDB), who went from 9% to 16% in the period.

Some recent economic data helps to understand the rise in the number of respondents who say the economy has performed better — but the effects of these indicators need to be weighed.

August, for example, registered the second consecutive month of deflation measured by the IPCA (National Consumer Price Index – Broad), under the effect of the decline in fuel prices. In 12 months, accumulated inflation was 8.73% — compared to 10.07% recorded in the previous month.

Still, Brazil’s inflation was the 8th highest in a list of the world’s top 20 economies. The food and beverage group continued to rise, 0.24% in August and 13.43% in 12 months. And the inflation of the basic food basket, which most mercilessly affects the poorest, was 25.9% in 12 months, according to a study by PUCPR (Pontifical Catholic University of Paraná).

On the employment side, even though the unemployment rate dropped to 9.1% in the quarter to July, the number of informal workers reached 39.3 million, according to Pnad Contínua (Continuous National Household Sample Survey) , published by the IBGE.

At the same time, according to Datafolha, the perception of a worsening of the Brazilian economy reached 50% in the most recent survey (they were 54% in August). For 21%, everything remained the same, and about 1% did not know how to respond.

In a more fragile situation in the labor market, women feel the country’s worsening more (58%); those with a monthly family income of up to two minimum wages, more hostages to food price increases, also (58%). For beneficiaries of Auxílio Brasil, the feeling of worsening is 55%.

recent report from Sheet pointed out that Brazil arrives in the 2022 elections with a lower unemployment rate than four years ago, but with higher inflation.

When they look at their particular situation, 27% of those interviewed by Datafolha say that it has improved in recent months (26% in the August survey and 20% in the June survey), 33% consider that it has remained the same, and 39% say they believe that worsened (compared to 42% and 47% in previous rounds).

The expectation of knowing who will govern Brazil in the next four years makes 53% (was 48% in August) believe in an improvement in the country’s economy, while 14% (there were 18%) think it will get worse and 26 % do not foresee significant changes – the expectation is also the highest since the beginning of the Bolsonaro government. For those who receive Auxílio Brasil, optimism is 58%.

In the survey, 6,754 interviews were conducted with voters over 16 years of age, in 343 municipalities in all regions of Brazil. The margin of error for the total sample is plus or minus two percentage points.

In an attempt to gain popularity among the poorest, the Bolsonaro government increased the Auxílio Brasil benefit to R$600 on the eve of the election. Looking mainly at the middle class, the ICMS tax on fuel was also changed. The president, however, remains stagnant in second place in voting intentions, behind Lula.

In the opinion of the chief economist at MB Associados, Sergio Vale, this feeling that the economy is better for 28% comes from the effects caused by the end of the pandemic, especially in the service sector, and also because of agribusiness, which has made the income to grow strongly in states where agricultural activity has greater weight.

“Other countries in which commodities have a strong weight are also performing better this year, such as Australia and Saudi Arabia. It has nothing to do with fiscal policy or government measures. Anyway, this feeling you see in services and in the prices of basic products helps in this more positive perception of the population”, he evaluates.

He adds that despite the optimism about the coming months, there are no guarantees that the feeling of improvement will continue to rise, on the contrary.

“With high interest rates and lower commodity prices next year, this increase in optimism is unlikely to continue. Alone, the structural measures taken by the government — in the absence of political stability and environmental responsibility — cannot sustain growth. And this government has nothing to deliver in these areas.”

Cosmo Donato, senior economist at LCA Consultores, adds that, despite the recovery at surprising speed after the worst moments of the pandemic, mainly due to the fall in unemployment and the high demand for services, there was an institutional worsening in the management of the fiscal side and the Bolsonaro government will also be remembered for dribbling the spending ceiling.

“The international context, which is always very important for Brazil, is really more nebulous. What we see is a world that grows less, with more inflation and the impact of the Ukrainian War on commodity, energy and food prices.”