After seemingly endless months of somber economic reviews and projections, the tone finally starts to give signs of change for the better. After all August is set to bring more than just the Rio Olympic Games, incidentally an event which organization and legacy are largely viewed with skepticism inside Brazil.
What is really decisive this coming August is the conclusion of removed President Rousseff’s ongoing impeachment process at the National Congress. Although technically speaking her return cannot yet be deemed impossible, hardly anyone would bet on it at this point. For one thing her disastrous policies have been determinant to an otherwise avoidable crisis. Above all, an extremely unlikely reinstatement would not give back her administration’s long lost political governability.
In anticipation of such foreseen outcome the market has been appreciating the Brazilian currency, while confidence in interim President Temer’s economic team begins to slow down – if not halt – the country’s freefall first initiated with the revelation of fraudulent data that had allowed Rousseff a marginal reelection almost two years ago.
With the loss of investment grade duly absorbed and put behind, there is increasing reason to believe Brazil’s luck already started to shift. The Brazilian real has regained 9% of its value in the past three months – out of 19% since January. In turn the stock exchange went up 10% in the last days and no less than 26% in the current year, indicating that the investors’ faith may be actually coming back.
Just as even at its worst moments the crisis managed to induce unique business opportunities, the present hints of improvement may shed new light on segments of interest, such as Brazil’s mighty agriculture, concessions and privatizations, delayed infrastructure or the overconcentrated banking segment, just to name a few. Yet again all that remains for sharp eyes and minds to grasp.
