Brazil's delayed GDP growth is putting a strain on Jair Bolsonaro's government, which fears a major setback in this year's municipal elections if the economy continues down this path.
So far this year, the real has already depreciated by 9.22 percent and on Friday reached a new all-time high of 4.40 to end up stabilizing at 4.38. To make matters worse, these successive currency depreciation - which logically increase social unrest - were followed by constant provocations from Economy Minister Paulo Guedes.
"Even the maids went to Disney when the dollar was at 1.80 (under the Workers' Party government), that was a terrible party. Now you have to walk in Foz de IguazÃº, go to the beaches in the northeast," he said. The minister later had to apologize for his comments.
Bolsonaro distanced himself from the minister after each currency jump and on several occasions made it clear that in his opinion "the dollar is expensive". But now, the differences with Guedes escalated to a new level.
According to Folha de Sao Paulo, the president demanded a minimum growth of 2% from the minister this year, a challenge that Guedes assured he could easily meet.
However, market expectations are increasingly contracting and are beginning to generate uncertainty within the Brazilian administration, where Guedes has many enemies. Especially in the military wing, which has gained a lot of power in recent weeks.
According to the traditional Focus Bulletin, the projections for the economic activity level for 2020 increased from 2.3% to 2.23% this week. Although this is a minor adjustment, the fear is that it will become a pathway to repeat the outcome of 2019, when this measurement predicted a rise of 2.5% and ended up marking a rise of just over 1%.
Low economic dynamism is already being reflected in the unemployment rate, which remains above two digits despite the slow improvement. In turn, the few jobs generated by the economy are concentrated in the informal sector.
In this context, former President Lula Da Silva said that "the people are driving Ubers and delivering pizza", since this platform has become one of the main employers in the country with more than 600,000 drivers associated.
As LPO explained, the former president plans to focus on the economic agenda to lead the opposition to the Bolsonaro government and specifically target Guedes.
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