“It is a severe scenario. On the fiscal balance front, the PEC (Constitutional Amendment Proposal) brings a totally opposite signal of fiscal irresponsibility”, says Andrea Damico, partner and chief economist at Armor Capital.
Brazilian Stock Markets are cheap, but may be even cheaper due to the fiscal policy signaled by Lula
For analysts, the transition government needs to give more market-friendly signs to reverse the current bearish trend
Considering that analysts thought that the presidential election was well priced, stock markets and USDBRL have experienced an above-average volatility period. This current moment reflects the investors discomfort given the Lula’s and his transition team indications regarding fiscal policy, besides the 2023 ministries undefinitions.
