The most important reason is the elections in the United States, which could increase political polarization in Brazil.
Invasion of the Capitol, Trump and Bolsonaro and Lula
✅ Receive news from Brasil 247 and TV 247 on the Brasil 247 channel and in the 247 community on WhatsApp.
247 The start of 2024 gives Brazil an aura of optimism, but President Luiz Inácio Lula da Silva's second year in office promises significant challenges. The economic downturn is casting a shadow over his presidency, while the administration's ambitious zerodeficit goal is proving a difficult undertaking. Nevertheless, local markets remain optimistic as the stock market hits record highs and bond issuance continues. Eurasia Group's 2024 Top Risks Report highlights both opportunities and warnings that will shape the path of Latin America's largest economy.
Amid global uncertainties, Brazil emerges as a protagonist capable of benefiting from geopolitical challenges. Two threats stand out on Eurasia Group's radar: “Middle East on the verge of collapse” (Risk #2) and “Divided Ukraine” (Risk #3). As a food and energy producer, the country is in a unique position to benefit from global disruptions and investment shifts. However, the report warns of domestic risks such as political polarization and global economic challenges that could impact domestic growth.
Despite the positive outlook, several challenges arise. The report highlights the US election risk (Risk #1) and the problem of unregulated artificial intelligence (Risk #4). These concerns, latent in 2023, reflect the reality of a polarized Brazil with distrust of institutions. Lula's likely decline in approval, combined with lower economic growth, could fuel stronger opposition. In addition, the possible election of Donald Trump could impact BrazilUS relations, with aggressive tariffs and challenges in environmental cooperation. As AI advances, Brazil faces the challenge of regulating without stifling innovation.
The report also highlights global economic risks, particularly related to China, Brazil's top trading partner. The importance of diversifying trade relations and developing new markets is highlighted to ensure growth and tax revenues. In summary, despite the opportunities, Brazil must take a strategic approach to addressing the challenges to ensure stability and sustainable growth in 2024.
CONTINUED AFTER RECOMMENDATIONS