Michel Temer’s corruption accusations can’t hide the fact that Brazil’s economy is starting to show signs of growth
For several years, Brazil has suffered from a considerable economic recession. Attempts to recover the financial greatness of South America’s biggest economy were thwarted by corruption allegations against former president Dilma Rousseff and constant fear of political corruption on all government chambers. However, with Michel Temer’s administration under way –after Rousseff’s impeachment–, fiscal improvement is, finally, a possibility.
May was a big month for Temer’s bet on growth. On May 10th, the Brazilian president stated that inflation rates were slowing down, as well as interest rates. He also said that the country’s economy was starting to show signs of prosperity and that the people were more optimistic about the future of Brazil. His statements were done in an event that made possible the extension of contracts for operating public ports up to 70 years. According to Temer, the signing of this decree will help improve the farming sector and expand the capacity of commodities’ exports.
These sorts of economic and commercial measures are some of Temer’s strengths. Despite corruption accusations, he’s been able to regain –not entirely but to some extent– the trust of foreign investors. Even though the recession in Brazil is still the biggest issue, Temer’s presidency has been the first one –in eight consecutive quarters– to declare monetary advancement. The first quarter of 2017 had a growth rate of 1% which can be considered low, but growth nonetheless. This change has been possible due to Temer’s austerity policies, which, according to MercoPress, are looking to impose a much-needed fiscal discipline.
Aside from this milestone in Temer’s presidency, it was also reported that the unemployment figures had, for the first time since 2014, dropped. The unemployment rate was at 13,7% and, although economists had predicted a rise to almost 14%, it fell to 13,6%. A small improvement, but it’s another sign of Temer’s hand in Brazil’s comeback. If the economy continues to grow and the unemployment consistently decreases, the Brazilian president could have something to bargain with when the allegations against him move forward.
So far, Brazilian political parties are undecided on whether to keep Temer or speed up the investigation against him. If his bet on economic revival pays off, it is highly likely that the government will be willing to keep him and back the necessary reforms to keep economic growth on track. Despite the damage he took after the corruption accusations, there’s the feeling that he has the ability to push reforms forward, normalize the economy, and increase trust in Brazil’s future.
LatinAmerican Post | Juan Sebastian Torres
Copy edited by Susana Cicchetto