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Wednesday, May 25, 2022

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    Lula lives “bites and blows” with the financial market

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    Lula started the year by scaring the financial market, but this week he showed some favorable nod to the markets (Image: Reuters/Ueslei Marcelino)

    The financial market seems to squirm with each declaration of Lula, leader of the polls for the 2022 elections, about his ideas about economic policy in a possible new term in 2023.

    The message below, which circulates on social media, is an example of this:

    “Praise by the former president himself to the government of Spain for reviewing the labor reform, the proclamation of the end of the spending ceiling by the former minister Guido Mantega and statements in the media from the most ideological sectors of the Workers’ Party came together to lead part of the market to bet that the former president leans more towards the guidelines adopted in the final years of PT’s presidential terms (known as the New Economic Matrix and repelled by the market) than those implemented at the beginning of the Lula government, in 2003″, evaluates the MCM Consultants in a report sent to customers this Friday.

    It is worth remembering that Brazil plunged into a recession of 3.5% in 2015 and 3.3% in 2016, during the government Dilma Rousseff, while the world grew by 3.2% and 2.8%, respectively.

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    Despite this fear caused by these statements at the beginning of the year, MCM points out that this week some milder signals from Lula and his allies were better accepted by the market.

    “In an interview with Band, Rui Costa, governor of Bahia, stated that he had not heard from the former president any defense of the repeal of the labor reform and waved towards a more moderate Lula in relations with the business community. In an interview with left-wing media outlets, the former president himself highlighted that the priority is not to bring down the spending ceiling, but to fight inequality, in addition to reinforcing his interest in consolidating and formalizing the alliance with Geraldo Alckmin. , emphasizes MCM.

    The PT federal deputy Paulo Teixeira pointed out, in an interview with journalist Monica Bergamo, the need for a “progressive democratic front” capable of “removing any threat of rupture with the democratic system that this president [Bolsonaro] It represents” .

    “This dynamic “tension – relief” (or, in the popular expression, “bite and blow”) observed in the first weeks of 2022 is nothing new in the political trajectory of the former president. In this sense, betting that, if elected again, he will initially adopt a more developmentalist line does not cancel out the possibility of concessions to market preferences during his term”, ponders MCM.

    Source From: Moneytimes

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