Brazil is due to post thier first surplus in domestic trade since 2013 as tax revenues increase and dividends get larger.

The Brazilian government announced it will post a primary surplus this year, the first since 2013, with public accounts benefiting from thriving tax revenue and large dividends from state-owned companies. A generous 13.548 billion reais ($2.63 billion) will be set as the budget for the central bank, central government and social security (Investing.com). Compared to estimates made two months ago, the government improved its estimated net revenue for the year by 69.9 billion reais. Leading to an additional 25.6 billion reais in dividends and a stronger tax collection. Additionally, Paulo Guedes (economy minister) stresses that reforms carried out by the government played a major part in the decrease of the unemployment rate and attracted more private investing (investing.com). As a result, it has boosted the Brazilian economy.  

The economic impact?

In less than 2 weeks Brazil will hold an election to elect or reappoint the current leader, Jair Bolsonaro. Bolsonaro’s indifference towards the destruction of the Amazon rainforest may signal alarm bells for the West, yet the country’s powerful soy and beef farmers still see a champion of their interests. Fearing a “Trumpian insurrection” if he loses, the right-wing former army captain is testing the patience of executives as it hangs by a thread. A declaration to defeat attempts to overrule an election gathered over a million signatures last month, as well as an open letter in defence of democracy which united Brazil’s conservative banking association Febraban. However, rumour has it that many Brazilian bankers and business directors continue supporting Bolsonaro to his opposition, former left-wing president Luiz Inácio Lula da Silva. Despite the excessive welfare spending before the election, his supporters like the administration’s free-market slant. The focus on privatisations, public finance and independence for the central bank is highly rated. Opinion polls show Lula winning the second round run-off towards the end of October, although polls also indicate he will lack majority amongst the new congress, where “Centrão” calls the shots. Hence, the fight shall continue until the very end.