The Brazilian economic crisis persists
The current situation in Brazil isn’t favorable for anyone. The corrupt political landscape is every day’s news and the Brazilian economy has been on the longest recession of its recent history. The impeachment of Dilma Rousseff and the work of judge Sérgio Moro were supposed to reduce the economic and political instability of the country. However, recent legal accusations made towards the president Michel Temer are making things worse.
On May 17th, corruption accusations finally reached Michel Temer through a report on Brazilian newspaper O Globo. This isn’t a surprise, since almost every politician has been linked to the Petrobras scandal and, more recently, to the bribes given to beef exporters. However, as said before, Temer’s presidency was supposed to help the country and, until now, it was doing exactly that. As analysts from The Economist stated, “Mr. Temer, a more adept politician than Ms. Rousseff, is pushing through vital economic reforms that she failed to advance”.
Aside from the political repercussions of Temer’s accusations, which were inevitable, the economic ones are the ones that hit harder. So far, Temer’s work had been positive: stable and lower inflation rates, low interest rates, and the promise of GDP growth –the first since 2014–. If it not were for the corruption allegations, Temer would have the political strength to carry on with pensions and labor reforms necessary to have a healthier economic future.
However, now the situation is, evidently, different. The corruption allegations have, first, reduced the confidence on Temer and, even more, on the Brazilian economy. The effects on the stock market didn’t take long to be seen and the currency isn’t having its best days either. Furthermore, the biggest worry is that, whether Temer gets impeached or not, he will certainly will have to face situations more complicated than the ones he’s been dealing with as of now.
First of all, the Brazilian president won’t have the possibility of carrying on with his economic policies as swiftly as before. The chance of keeping GDP growth on a high note is less likely. As noticed before, the necessary reforms will be halted or, even worse, forgotten. In the case that Temer resigns or gets impeached, Brazilians will have a difficult job choosing the next president. Even though the people are battling corruption, most recognized politicians are under investigation. The options are limited and it’s hard to believe that most of the population will be happy with any choice.
In spite of the possibility of economic improvement –which was taking place in the last month– Brazil needs to handle its political problems. Only then it will have the chance of restarting its economic growth.
LatinAmerican Post | Juan Sebastian Torres
Copy edited by Susana Cicchetto
