Amid good economic news, the Government has to deal with a possible troubled political year to maintain stability and manage to approve its projects. President Lula (PT) begins 2024 with several challenges in the National Congress and under threat from parliamentarians, who are trying to impose serial defeats on the Executive.
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Main Goals
Two of the Government’s main missions should be the attempts to maintain the vetoes on the Budget Guidelines Law (LDO) and to approve the provisional measure (MP) that provides for the gradual repayment of the payroll until 2027. There are still other measures to reinforce the Union’s cash flow this year, a priority for Finance Minister Fernando Haddad.
Both the vetoes to the LDO and the MP for the re-encumbrance have a direct impact on budget execution and government revenue.
According to news sources, even though, no final strategy was presented, the idea is to postpone voting on vetoes as much as possible so that the government can gain time in negotiations and also be able to show parliamentarians that the amendments will be released in 2024, the election year, at the pace they desire.
Economy
On the economic side, the government has seen positive results, giving force for some of its maneuvers. With a falling unemployment rate, growth in economic activity, and lower inflation, the year 2023 should end with a positive balance for the Brazilian economy.
The market improved its outlook for the economy in 2024 and confirmed expectations for 2023. According to the Focus survey, which captures the market’s perception of economic indicators, the basic inflation rate (IPCA) should be 4,47. For the Gross Domestic Product (GDP), the experts consulted continue to predict growth of 2.92%.
Financial market economists raised the growth projection for the Gross Domestic Product (GDP) for 2024 from 1.52% to 1.59%. The market expectation for official inflation remained stable at 3.90%. The market projection for the economy’s basic interest rate remained stable at 9% per year. The projection for the dollar exchange rate for the end of 2024 remained at R$5. Regarding the trade balance, the projection continued at a US$70.5 billion surplus. The report’s forecast for the inflow of direct foreign investment into Brazil this year remained at US$65 billion.
Data from the Brazilian Institute of Geography and Statistics (IBGE) showed that the country’s labor market once again registered a decline in the unemployment rate in the moving quarter up to November. The unemployment rate was 7.5% until November, the lowest level for this period since 2014 when the indicator was 6.6%.
Source: Folha UOL
