April 18, 2019


1. Petrobras increases price of diesel

As of Thursday, Petrobras increased the average price of diesel by 4.8%. The price hike is lower than the 5.74% increase announced last week, which was cancelled at the request of President Jair Bolsonaro. The change resulted in a R$ 32 billion (USD $8.16 billion) loss in the company’s value on the financial market due to fears of government interference in Petrobras’ price policy. The price increase could also result in the planned trucker’s strike being brought forward due to their desire for lower fuel prices, among other demands. On Tuesday, before Petrobras announced the new price, the government tried to appease the truckers by offering them R$ 500 million (USD $127.6 million) in credit to cover the cost of new trucks. However, protesters viewed the proposal as “alms”. A new strike could lead to a 4% drop in Brazil’s GDP.

Valor Econômico: Petrobras reajusta diesel e reafirma independência
Folha de S.Paulo: Aumento de diesel e greve podem afetar o PIB, diz ministro
Revista Veja: Caminhoneiros ameaçam entrar em greve em 10 dias

2. Federal Supreme Court censors websites, blocks users and causes controversy

An investigation by the Brazilian Supreme Court into fake news, threats and insults against justices led to criticism of ministers Dias Toffoli – President of the Supreme Court – and Alexandre de Moraes – leader of the inquiry. Moraes ordered the censorship of websites that published a story in which Toffoli is mentioned by Marcelo Odebrecht as a “friend of a friend of my father” during a suspicious conversation. There is no mention of money being exchanged. Odebrecht was arrested and convicted during Operation Car Wash. Moraes also ordered social media accounts to be blocked due to publications he considered offensive and defamatory. The order also included search warrants. Brazil’s Attorney General criticized the Supreme Court for acting as police and Moraes postponed the investigation for 90 days. Only after this period will attorneys be able to analyze the evidence gathered during the course of the investigation. President Jair Bolsonaro posted a message on Twitter defending freedom of speech as an “inviolable and legitimate right”. According to Toffoli, “freedom of speech cannot feed hatred.”

G1: STF bloqueia contas de redes sociais e censura sites
O Estado de S. Paulo: Ministros se isolam após decisões contra fake news
Folha de S.Paulo: Liberdade de expressão não pode alimentar ódio”, diz Toffoli
G1: Entenda o caso da investigação aberta pelo STF

3. Economy Minister forecasts primary deficit until 2022

Initial calculations by the Ministry of Economy – based on next year’s budget – indicate that the primary deficit for 2020 will be R$ 124.1 billion (USD $31.7 billion), an increase compared to the R$ 110 billion (USD $28.1 billion) predicted a year ago. The government’s revenue for 2020 is projected to be R$ 1.643 trillion (USD $419.1 billion). According to the government, public expenditure will remain in the red until at least 2022. During Jair Bolsonaro’s campaign, now-Economy Minister Paulo Guedes promised to end the deficit this year. Expectations for GDP growth are 2.2% in 2019 and 2.7% in 2020. Special Secretary of Finance Waldery Rodrigues believes the estimates are conservative and can be improved through improved economic results and legislation.

Valor Econômico: Contas públicas devem ficar no vermelho até 2022

4. Minimum wage will not be increased until next year

This week, the federal government proposed the suspension of the minimum wage increase policy. The increase was included in the 2020 Budget, following inflation hikes. If approved, the decision will put a stop to a 25-year old public policy. The bill sent to Congress determines that the lowest wage paid to a worker beginning in January 2020 will be R$ 1,040 (USD $265.06) per month, a 4.2% increase (accounting for inflation). Currently, the minimum wage stands at R$ 998 (USD $254.36). If the bill passes, the administration will see a decrease in public expenditure, as changes will also include pensions. For every R$ 1 increase in minimum wage the federal government spends R$ 300 million. For this reason, expenses with pensions will increase by R$ 12.5billion (USD 3.2 billion) next year. At the moment, 65.4% of pensioners (22.9 million people) receive minimum wage. The government will present a bill determining the new minimum wage increase policy by the end of the year. 

Folha de S.Paulo: Governo suspende aumento real do salário mínimo

5. Bolsonaro is featured on 100 most influential people list

President Jair Bolsonaro was named one of the most influential people in the world by Time magazine. The list was published on Wednesday and Bolsonaro is the only Brazilian among people like Donald Trump, Pope Francis, Israeli Prime MinisterBenjamin Netanyahu and ItalianDeputy Prime Minister Matteo Salvini. Bolsonaro’s profile in the magazine describes him as a Brazilian leader capable of putting an end to “a decade of high-level corruption” and “is the best chance in a generation to enact economic reforms that can tame rising debt”. However, the President is also defined as a “complex character” andan “ultraconservative homophobe”. Former presidents Luiz Inácio Lula da Silva and Dilma Rousseff have also featured on past lists. Former President Michel Temer was mentioned by Time in 2017 as one of the five most unpopular leaders of the world.

Valor Econômico: ‘Time’ elege Bolsonaro como um dos 100 mais influentes