O Power360 publishes this Tuesday (3.jan.2023) the full text of Drive of the Yearthe 1st edition of Drive Premium for 2023, with a predictive analysis of what could happen in the next 12 months.
It is an in-depth guide prepared by the team that produces the most informed newsletter on issues of power and politics. It was sent to newsletter subscribers on Monday (2.jan).
In this edition, the Power360 it’s the Drive offer an overview of how the year in power, politics and the economy in Brazil and the world will be. Here are some of the central themes for 2023:
- 1st year of Lula’s 3rd term;
- uncertainties in the economy and a deficit of R$ 231.5 billion;
- More conservative Congress from February;
- upcoming changes in the STF – 2 justices retire;
- war continues in Ukraine.
To read and save: click on here or on the photo below to download the Drive of the Year (10 MB).
RELEVANT ISSUES
The team that produces Drive list below 13 topics that must have the attention of the world:
- 1. perforated ceiling – Lula begins his term with articulations to maintain the license to spend beyond 2023. Only in this way will he be able to extend the increase in the Brazil Aid. The situation empowers Arthur Lira, who should remain in charge of the Chamber, and imposes pressure for a greater fiscal adjustment than desired by the new government;
- 2. report amendmentsr – after the Supreme Court consider the unconstitutional mechanism, deputies and senators approved a new rule. All came out in profit, except the public accounts. Congressmen start 2023 with much more guaranteed money than they had before;
- 3. consolidation of parties – Lula will be the 1st to reap relevant effects from the performance clause. Because of the rule, will trade with 16 associations in the Chamber. That’s 11 fewer than the number of parties at the beginning of Bolsonaro’s term. This will facilitate governance;
- 4. Bolsonaro’s reaction – ex-president now he has retirement of the Chamber. He will also receive a salary and position from his party, the PL – which until December 30 was with the blocked accounts for questioning the results of the 2nd round of more than half of the ballot boxes. If he leaves the state of melancholy he plunged into after his defeat by Lula, he could lead the opposition against the current government. The anti-PT ideological group is large (34% of voters think that the Lula administration will be worse than Bolsonaro’s). There is room for the former president to build a candidacy in 2026. It remains to be seen whether that is what he wants. Since the defeat, he has given mixed signals;
- 5. tax policy – the government starts without presenting anything concrete about controlling spending or raising taxes. The market will closely follow the announcement of the new fiscal anchor, which in principle should take place by August, and the progress of a tax reform – a promise always made by the current government since FHC’s 1st term and never fulfilled;
- 6. Ukraine war – if it remains unresolved, it will continue to put pressure on fuel prices and feed the current wave of inflation in the world;
- 7. PIBinho – large economies, especially in Europe, will continue to raise interest rates to contain inflation. The measure will hold the GDP growth of these countries or will be accompanied by recession. This could spread globally;
- 8. interest in Brazil – the expectation is that they will remain at a high level at least until the middle of the year. The reduction may only come in 2024. The independent Central Bank will live with a government that has an ambiguous discourse: it talks about spending more for social programs and promises to reduce the budget deficit;
- 9. pensions – a revision of the value of the benefits approved by the stf it could mean an extra expense of BRL 46 billion by 2029 for the government. This will signal a worsening of the deficit and could lead to higher future interest rates;
- 10. state – the chamber changed the law that reduced the quarantine of politicians to direct them to 1 month. The text is now stalled in the Senate. There is uncertainty about what Petrobras’ management will be and how it will update fuel prices at refineries;
- 11. energy – Europe will remain in high demand for fossil fuel to replace what it received from Russia. State projects involving renewable sources should gain prominence. Green hydrogen will have another chance to leave the hype into reality, with a push from the US billion dollar climate policy;
- 12. global chains – governments and companies in developed countries intend to encourage the installation of factories to supply inputs in their own territories or in stable countries. The idea is to avoid the lack of components due to wars and other conflicts. Brazil could benefit if it manages to attract projects;
- 13. China – began to make the lockdowns constants against covid at the end of 2022. Whether or not this relaxation continues will be decisive for the country’s growth rate. nations that export commodities to the Chinese, like Brazil, they will be attentive. Another possible consequence: the recovery of the Chinese economy will also put pressure on fuel prices, pushing up the cost of oil.
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O Drive of the Year 2023 was sent to newsletter subscribers on January 2, 2022. Drive or consult about subscription plans, click here.
If you find any inaccuracies, please send a message to [email protected] O Power360 will make the correction. The file was updated on January 3rd.
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