May 31, 2019


1. Bolsonaro suggests agreement between political powers to control crisis

After the marches in support of the reforms proposed by the government, President Jair Bolsonaro suggested an agreement between Rodrigo Maia,President of the Chamber of Deputies, Davi Alcolumbre, President of the Senate, and Dias Toffoli, President of the Federal Supreme Court, to put an end to the political stalemateAlthough the details are still being ironed out, the press has already announced that the Pension Reform, the tax reform, an end to bureaucracy in public service, improvements to the National Security Policy and changes to the Federal Pact – which determines how each state will spend their tax revenue – will be the main priorities of the agreement.Before the document has even been signed, politicians and judges have already expressed that they disagree with the administration and its plans. In an interview with Veja magazine, Bolsonaro said people shouldn’t expect him to “solve everything all of a sudden” and that the people responsible for the future of the country are “lacking patriotism.”

Learn more about the agreement proposed by the President to Congress and the Federal Supreme Court in Brasilia Report.

Folha de S.Paulo: Bolsonaro propõe pacto com Congresso e Supremo
O Globo: Pacto de Bolsonaro é criticado no Congresso e no Supremo
Revista Veja: “Não vou resolver problemas na raça”, diz Bolsonaro
O Estado de S. Paulo: Harmonia entre Poderes não pode ser submissão

2. GDP decrease of 0.2% revealsa stagnant economy

The Brazilian economy shrank by 0.2% in the first three months of 2019 when compared to the last three months of the previous year. According to the Brazilian Institute of Geography and Statistics, this is the first negative result since the final quarter of 2016. In the last three months of 2018, the GDP increased by 0.1% in comparison to the previous quarter. The situation of the Brazilian economy directly affects expectations for economic growth in 2019. At the beginning of the year, there was an anticipated growth of 2.5%, which has since been reduced to 1.23%, according to research by the Central Bank contributed to by economic analysts all over the country.The contraction indicates economic stagnation.

O Estado de S. Paulo: PIB cai e demonstra estagnação da economia
Valor Econômico: Investimento encolhe e PIB deve ficar abaixo de 1% no ano

3. Federal government looks to allow U.S. dollar accounts in Brazil

The Central Bank is considering allowing people to open bank accounts in U.S. dollars in Brazilian banks, facilitating transactions for people who have expenses or debts in the U.S. currency, and for those who hold accounts in Brazilian Reais in other countries. The change – which has no set start date – extends a benefit to individuals that is currently exclusively available to companies in the insurance, infrastructure and energy sectors, as well as diplomatic representatives. Central Bank President Roberto Campos Neto stated that allowing for dollar accounts will be a gradual process and will not come into effect immediately. According to him, a new draft bill on foreign transfers will be announced soon. The Central Bank will also announce a series of measures that will be available until currencies can be easily converted.

Valor Econômico: Banco Central quer liberar conta em dólares no país

4. Brazil’s primary surplus in April is the worst since 1998

The central government reached the end of April with a primary surplus of R$ 6.54 billion (USD $1.64 billion), the smallest for the month of April since 1998 and the third worst monthly result in the country’s history. Surplus occurs when a country’s revenue is greater than the amount it spends. The preliminary result, however, does not take into consideration what the administration will have to pay in interest rates on public debt. According to the Treasury, the low surplus is due to a 1.6% decrease in federal revenue. Expenses increased 0.5% due to payment of pensions and public servants.

O Globo: Superávit primário de abril é o pior em 21 anos

5. Brazil sees new protests over cuts to the education budget

On Thursday, students and teachers from private and public schools across Brazil took to the streets once again protesting cuts to public education.  Although these protests were smaller than those on May 15th, they gathered more people actively involved in the education sector and counted with the support of labor unions who are protesting the proposed pension reform.  The marches had no official participation from opposition parties, but some political leaders got involved and carried flags that read “Free Lula.” At least 100 cities saw protests. In a presidential decree announced in March, the administration froze R$ 29 billion (USD $7.4 billion) of the federal budget, R$ 5.1 billion (USD $1.3 billion) of which was cut from public education. Out of the amount currently unavailable, R$ 1.7 billion (USD $433.3 million) was to fund public higher education. Yesterday, the Ministry of Education released a statement stating public schools could not encourage protests and that people should denounce attempts to do so.

O Estado de São Paulo: Cortes na Educação motivam novos protestos