A month has passed since the establishment of Jair Bolsonaro and it is therefore still early to make an initial assessment of the work of his government.

The impression is that the Bolsonaro team is taking measures of the real dimension of the task that awaits it and of the difficulties it will have to face to put into practice the government plan (still very general, among other things).

On January, 23rd the Minister of the Civil House, Onyx Lorenzoni, presented a document with 35 goals to be reached in the first 100 days of government. The 35 goals concern all areas of government, but do not elaborate the legislative measures to be adopted and do not quantify the results that are to be achieved. Caused some concern the fact that the pension reform was not included among the goals to be achieved, even if the economic team – commanded by Paulo Guedes – immediately ensured that the reform is the priority goal of the beginning of the mandate (and for this not even included among the 35 of the document presented by Lorenzoni).

For those wishing to know the 35 goals, here is a link:


Bolsonaro himself is under pressure for the events envolving his son Flavio, elected senator, under investigation for alleged links with the militias of Rio de Janeiro and for the suspicious financial movements of one of his close collaborators. For Bolsonaro, elected as a champion of the fight against corruption, it is an advance of what awaits his government, which will (rightly) be the target of the press and public opinion for its entire mandate.

From the political point of view, the government has scored the election of a president of the Senate. This is Davi Alcolumbre (DEM), who defeated Renan Calheiros, a symbol of the old politics that was president of the Senate for several years during the government Dilma Rousseff. Rodrigo Maia (DEM) was elected as President of the Chamber

We cannot fail to notice the tragedy of Brumadinho, where a dam that collected residues from a Vale’s iron mine yielded, causing a wave of mud and debris that swept away houses, roads, bridges and causing more than 120 deaths and another 200 people still missing. A warning to everyone: environmental and safety issues can not be neglected in the name of profit and economic growth.

Let’s see the update of some economic indicators.

GDP (Value added at market prices)

2013 2014 2015 2016 2017 2018 2019
GDP – real growth (%) 2,7% 0,1% -3,9% -3,5% 1,01% 1,30% 2,50%

The GDP growth forecast for 2019 remains at around 2.5%.

The market continues to be moderately optimistic about the performance of the economy, counting with the approval of the reforms guaranteed by Guedes but which requires a political articulation that the Bolsonaro team will have to demonstrate to possess.


Inflation and real/dollar exchange 

2013 2014 2015 2016 2017 2018 2019
IPCA (IBGE – %) 5,90% 6,40% 10,67% 6,29% 2,95% 3,69% 3,94%

The inflation growth forecast in 2019 is still down, falling below 4%. Of all the current signs of the economy, the persistence of relatively low inflation is certainly the most encouraging.

If inflation were to remain under control, Banco Central could maintain or even further decrease the discount rate (SELIC), giving a further stimulus to growth.


  2013 2014 2015 2016 2017 2018 2019
Exchange rate R$/US$ (end of the period) 2,34 2,66 3,90 3,25 3,25 3,75 3,70

The dollar is quoted today at R $ 3.68, slightly lower than the prices of a month ago. The market predicts a listing of R $ 3.70 for the end of 2019, but I reiterate what I wrote a month ago: if the investment flows should increase as expected and in the absence of strong turbulence on the international markets, the real could appreciate on the dollar in a significant.

The euro is now listed on R $ 4.21.


Interest rate

2013 2014 2015 2016 2017 2018 2019
Nominal Interest rate (end of the períod) 10,00% 11,80% 14,87% 13,75% 7,00% 6,50% 6,50%
Real interest (deflactor: IPCA) 2,10% 4,20% 2,60% 6,91% 4,05% 2,81% 2,56%

The discount rate (SELIC) forecast at the end of 2019 fell back to 6.5%. Considering the downward inflation, the real interest rate estimated at the end of 2019 is the lower one in six years. The scenario is very favorable, we can say that the Temer government has prepared the conditions for a strong economic recovery.


The Brazilian stock market (Bovespa)

Favorable month for the Brazilian stock exchange, despite the sharp decline suffered by Vale shares after the Brumadinho tragedy.

The stock index (Ibovespa) is now around 97 thousand points, and is now close to the psychological threshold of 100 thousand points.

I repeat what was written in the last post: there are the conditions for the Brazilian stock index to have an extraordinary performance in 2019.