Blog HUB55

Bolsonaro: a new investment wave in Brazil?

If not only because a new government is in place, which usually brings hope of new direction in the economy, it is the alignment of Bolsonaro with Trumps economic guidelines that will define a potencial new era of boom. Despite some tendency to protect the domestic businesses in contrast to the wave of globalization, Trump emphasizes the economic growth as his main policy, and Bolsonaro follows thru.

The last two terms of the old government in Brazil brought the country to  stagnation and deep unemployment. Based on protection to some industries and unsustained credit stimulation, the outcome turned out to be a complete mess in the public accounts and repetitive annual deficit. An impeachment interrupted that crazy road to bankruptcy and started the cleansing of the economy. But the newly elected government promises much strong recovery.

Bolsonaro seems to understand what it takes to recover. He chose Paulo Guedes, one of the so-called Chicago boys, as the new Minister of Economy, embracing several financial areas of government. Likewise, the new Minister of Justice is a judge who sentenced the former president Lula to twelve years. He will also embrace justice, public safety and some other important duties, trying to rebuild what was destroyed of our political system from corruption and bribery.

With those two pillars re-erected, economy and politics, plus the so needed reforms the recently elected new Congress is expected to approve, there is a great opportunity to realize the Brazilian dream of full employment and balanced public accounts. And that means more investment, a great opportunity to both domestic and global players.

Maurício Costa