Fábio Alves, economic commentator for the state of S. Paulo, underscores the financial market’s euphoria with the new government release
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247 “Local investors and no longer just foreign investors have fallen back in love with the Lula government after it pushed ahead with a number of key measures on the economic agenda and highlighted Brazil’s risk appetite amid a global backdrop of greater popularity among emerging markets. The result is an impressive rebound in the stock market, exchange rate and interest rate futures market. At the end of the first half of the year, the dollar recorded its sharpest decline in seven years, falling below R$4.80. “Ibovespa recorded its highest increase in this period in four years, around 120,000 points,” writes journalist Fábio Alves, columnist for the Estado de S. Paulo newspaper.
He also stresses that “the Lula government’s optimism extends beyond financial asset prices,” noting that “inflation expectations have come down significantly in recent weeks, while at the same time gross domestic product (GDP) growth forecasts have declined this year.” made a leap”. Alves reminds that most analysts are predicting that the Selic interest rate will fall from 13.75% to 12% by the end of the year. The columnist points out that greater confidence attracts investment and boosts consumption.
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