Synthesis of the Brazilian Economy
The great majority of the recent opinion polls indicate that Lula’s advantage over Bolsonaro is narrowing, and in some cases even suggest a statistical tie. The rejection of both leading candidates also is relatively equal, at a level above 40%, reflecting the sharp polarization of the current electoral process. Bolsonaro has been collecting the direct and indirect fruits of his “fiscal goodwill”, while Lula has been softening his rhetoric to attract centrist voters. Barring some extraordinary event, time will tend to help Bolsonaro, via the “ripening” of the mentioned fruits. The winner will face the costs starting next year.
After six months, there are no signs of a diplomatic solution to end the war in Ukraine. Now that Russia dominates a fifth of Ukrainian territory, Putin’s strategy is to stretch out the conflict until winter, using the supply of gas to Europe as a weapon to erode support for Ukraine. In light of this scenario, the European countries are trying to build up stocks to near 90% of capacity by the end of autumn as a strategy to reduce pressure from Russia. Even if the more dramatic effects of the energy crisis are avoided, the political costs will be huge in terms of high inflation and economic deceleration in the region. In this context, the Italian election will take place on September 25th, with a probable victory of the coalition of parties of the right and extreme right, headed by Meloni, Salvini and Berlusconi, who advocate revision of the PNRR of Draghi, among other major course changes. Another big headache for the European Union.
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