Synthesis of the Brazilian Economy
After 40 days, the war provoked by the Russian invasion of Ukraine, “forecast” by Putin to last only a few days, has left a trail of atrocities committed by the invaders. The heroic resistance of the Ukrainian army and civilians, with the support of Western countries, has managed to contain the Russian advance. An example is the relief of the capital, Kiev, which was encircled last week. Efforts to reach a peace agreement are proceeding apace, including Turkish President Recep Erdogan’s attempt to organize a meeting between Zelenski and Putin in Istanbul. Ukraine has publicly yielded on some points, such as promising neutrality and ending its efforts to join NATO, but without renouncing the country’s territorial integrity. Putin has not changed his professed goal of “denazifying” Ukraine and appears interested in concentrating the attacks along the northeastern to southeastern border of Ukraine, utilizing offers of armistice followed by more intense attacks. The economic effects have spread around the world, especially the steep rises in the prices of energy, grains and fertilizers, among others, causing economic deceleration.
In Brazil, the vaccination program seems to be bearing fruit, with easing of the pandemic, allowing progressive relaxation of the sanitary restrictions. Signs have appeared of improvement in the labor market, but high inflation is corroding peoples’ incomes, obliging the Central Bank to maintain its monetary tightening cycle. On the other hand, inflation has also increased tax revenues for all levels of government in nominal terms, stimulating shortsighted public spending increases. In the presidential scorecard, some changes have occurred, but important definitions will only come starting in July.
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