Brazil at mid-year: Four trends to watch now
By Luciana Barbetta
Global and U.S. attention is focused on Brazil this year in the run-up to national elections in October amidst concerns over an economic slowdown, rising food insecurity and a polarizing electorate. Recent polls show an 11% lead for former President Lula de Silva over incumbent President Jair Bolsonaro, but no sign that either candidate will receive enough votes to win in the first round of balloting. As in other Latin American countries, voters identified with the political left have increased in influence — from 41% in 2013 to 49% in 2022.
Here are four trends to watch in the months ahead:
1. Slow economic recovery and soaring inflation
Brazil’s economy has yet to resume its pre-COVID performance. According to the OECD, Brazil currently has the fourth highest inflation rate among the G20 countries, with a 12% rate over a 12-month period. Soaring prices in sectors such as fuel and food and energy are causing inflation hikes. The Central Bank is struggling to control inflation through interest rate hikes. However, the pandemic was not the only reason for the weak economic results. The war in Ukraine has led to a surge in the price of commodities and political uncertainty is driving away foreign investors from the country.
2. Instability in Brazil’s largest oil company
Petrobras, Brazil’s largest oil company (the state is the main shareholder), will have its fourth president since the start of President Bolsonaro’s term in 2019. The most recent president resigned on June 20 following pressure within the government over recent fuel price increases. Soaring prices have impacted inflation and led to a decrease in the president’s popularity. The company sets fuel prices at its refineries in line with international standards. President Bolsonaro plans to change Petrobras’ pricing policy in an effort to reduce fuel prices for consumers with an eye on October’s national elections.
3. Amazon: Illegal activities in the spotlight
The brutal deaths of British citizen Dom Phillips, a correspondent for the UK’s Guardian, and Bruno Pereira, a Brazilian indigenous researcher for FUNAI (National Foundation of the Indigenous), has focused attention on the presence of organized crime in the Amazon. The region is disputed by illegal miners, loggers and fishermen, while drug dealers use the area as trafficking routes. According to the United Nations, there was an extremely slow response to search for the victims despite the global repercussion of the case. Brazil’s government has been criticized for not taking measures to protect indigenous communities and address criminal activities across the vast Amazon region.
4. Presidents Bolsonaro and President Biden meet in person for the first time
President Bolsonaro developed a close relationship with former U.S. president Donald Trump, He recently met U.S. President Joe Biden for the first time at the Summit of the Americas in Los Angeles. In a bid to reverse Brazil’s international isolation, Bolsonaro has defended the environmental protection of the Amazon despite rising levels of deforestation. The two leaders also discussed Brazil’s upcoming elections and strengthening democratic institutions. Although President Biden praised Brazil’s electoral system and democracy, the Brazilian president constantly casts doubts on elections with fraud allegations. However, Bolsonaro has affirmed he will leave office democratically under “clean elections.”
Want to work with us? Reach out to Luciana Barbetta at LBarbetta@webershandwick.com
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Powell Tate is the Public Affairs Unit of the Weber Shandwick Collective. For more information, visit: www.powelltate.com
