Wednesday, 22 February 2017

Brazil 2017-2020

2016 wasn’t a great year for Brazil, with inflation above target, GDP falling and public debt ( subject to Brazil’s high interest rates) increasing again not to mention the enforced presidential change as Rousseff was removed from office. In theory the picture doesn’t look much better for 2017, but with so much happening elsewhere in the world perhaps Brazil will get off lightly in the end.
Of course as readers will know Brazil is my bête noire where I consistently fail to get things right so whether this forecast will be worth it is debateable. Anyway, here goes.
We are almost through January and February 2017 now (20/2). There have been some positive signs that the country is turning the economic corner, but the continuing corruption allegations and proposed austerity reforms could mean this reverses. 
 What we can say is that we are moving into a new 30 year phase in terms of leadership. However there is evidence that the corruption problem has not gone away and that the leadership will continue to be under a cloud for the next year at least. Other than that the period is rather mixed, although the positive economic green shoots may continue they are merely shoots.
June to August is not significantly different, although there may be communication difficulties of restrictions.
September and October are also a continuation of this phase though the focus moves away from the leadership for a while.
However there is likely to be much more going on in terms of policy and growth now. Generally it will be positive although there are some difficulties to overcome.
November and December are quite different in tone. The people may be more assertive though conflict is not necessarily signified. There may be positive signs of sustained growth and improved external relations.
By the end of the year, though, there may be some serious challenges for the leadership as there is an attempt to break away from the past.
The background picture for 2018 is relatively positive.  However there are many smaller obstacles to overcome.
January and February 2018 see some elements of the population disgruntled and protesting, but this is not too extensive.
Attempts to end certain economic practices and corruption as well as moderate austerity measures have a mixed impact in the short term.  
March to May then sees the issue of leadership corruption and weakness return- there are winners and losers and it is difficult to see much progress being made- inertia seems to be the order of the day.
I don’t see this as a time of much progress even if there is the odd snippet of positive news.
June to August is more difficult for the people as the inertia continues. But it is a better time for the government and there is a change of pushing forward and creating some growth.
September and October are once more tricky times for the leadership – with that continued question mark or cloud over its ability. It should be election time so many issues will surface. There is no clear indicator of change despite the question mark. It is likely that the president will continue but perhaps weakened further.
There is evidence that economic measures are slowly improving matters and restricting the more negative elements which traditionally drag the country down.
The people are slightly unsettled and this might be news worthy on a wide scale. There is certainly a likelihood of the country getting wider exposure now.
January and February 2019 is a good time for the Brazilian people but a more mixed time for the leadership which remains weakened by  mis-information and/or deception. However it has support to continue
March To June is a another mixed phase, but this time the focus is off the leadership. There are economic ( debt service?) challenges but there is also an unprecedented opportunity to reform some of the more difficult structural problems. There is resistance to this which might be disruptive and it won’t be a straightforward resolution but progress can be made.
July to September is about the people again and brings the country into the limelight for a while.
Although the budget and economic situation is mixed, there are many positives to be taken form this period.
October and November have shades of March to June about them with many of the issues resurfacing. Although there are elements of opposition I would expect this again to be a good period for the people and moderately ok for the government.
December sees this phase of changing the more resistant structures not just continue but reach a peak by the year end. This does put significant pressure back on the leadership but there are definitely upsides to the situation.
The events of 2020 do not miss Brazil and as early as January and February we can see some budgetary or other resource challenges arising. However the changes that makes to the foundations of the country are actually position. In addition the reforming activity is continuing  and although there are tricky hurdles to cross this might be a good time for the country and its leadership.
March to July is certainly busy. Especially for the people in general. This does put pressure on the leadership as there are people who are not prepared to accept the economic situation  and are prepared to stic their heads above the parapet and say so quite vehemently .
But the signs of progress being made are really quite unequivocal now.
August and September are more like January and February and the pace is slower. However there is a sense of gradual stability returning to the people day to day.
October and November see this all integrated and at least some signs of final economic resolution to some issues. It is not a bad time and relative to many places is quite calm.
A lot of the pressure is off the country by the year end, despite the surrounding financial issues. There can be more progress and a much better resolution of any debt issues- perhaps renegotiation or just a lesser burden. 

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