One of the great specialties of former President Lula, who is preparing to return to the Presidency of Brazil on the 1st of January next, is the administration of “cursed inheritances”. It’s how he solves all the problems that appear in his government – everything is to blame for those who came before, even if there is no fault. Quite the contrary: he gets the house in order, but a minute later he is already complaining that they have dropped a disaster on him, and that he has nothing to do with anything bad that happens until the last day of his term. It was like this with Fernando Henrique. Lula received a Brazil without the worst problem in its economic history — inflation, eliminated by his predecessor with the Real Plan. The privatization of telecommunications was also ready, without which the country would be shipwrecked, the mining-steel industry and the state banks, which functioned as the governors’ private mint — and were possibly the only ones in the world to give prejudice.
Lula did well: he applied this vicar’s tale, and Fernando Henrique, instead of exposing the lie, ended up thinking that he, Lula, is now the man who will save Brazil. History can repeat itself now – with the difference that Jair Bolsonaro is unlikely to ever kiss the hand that Fernando Henrique did. The new president already accuses the current government of the worst economic crimes of the last 500 years, and of all other types — and the reality is exactly the opposite. Bolsonaro will leave Lula with the best situation the country has ever had in the transition from one government to another, in any recent era.
This is what the facts and figures show, as can be seen from 12 key indicators of the situation of the Brazilian economy at this moment.
1. Inflation
Dilma Rousseff, Lula’s successor in the Presidency of the Republic, was removed from the government, leaving as a legacy an inflation that was a true accursed inheritance. In August 2016, when the impeachment was completed, the Consumer Price Index — which measures the cost of living — for 12 months was close to 9%. In the United States, it was just over 1% for the same period.
In September of this year, the two countries exchanged positions. Since then, Brazilian inflation has remained lower than that of the United States. In October, for example, price variation was 6.5% in Brazil and close to 8% in the US.
2. Growth
The economy also shows more resourcefulness compared to the end of the last PT administration. According to the International Monetary Fund (IMF), Brazil’s Gross Domestic Product (GDP) shrank by around 4% in 2016. At the same time, the world grew by around 3%, and China registered a 7% expansion. .
For 2022, the IMF estimates almost 3% growth for the Brazilian GDP. The projection for the performance of the global economy and Chinese GDP this year is practically the same as in 2016.
The recovery of national production took place even in an environment of international uncertainties. In addition to the Russian invasion of Ukraine, which began in February, the government of President Jair Bolsonaro had to face an unprecedented challenge: the coronavirus pandemic — a global health crisis, which limited trade between countries, broke companies and disorganized production chains. around the globe.
3. Unemployment
Currently, the unemployment rate in the country is around 8%. Number that was only lower in mid-2015, according to surveys carried out by the Brazilian Institute of Geography and Statistics (IBGE).
During the pandemic, the unemployment rate calculated by the IBGE broke a record of almost 15% in two moments: July to September 2020 and January to March 2021. The mass destruction of jobs occurred in the wake of the restrictive measures adopted during the crisis sanitary. Contrary to the president’s position, the restrictions imposed by governors and mayors followed the maxim: “We’ll see the economy later”.
4. Trade balance
In 2016, the current value of the Brazilian trade balance — the sum of exports and imports — closed at 20% of the country’s GDP. In 2021, the proportion has grown to 30%. The data demonstrates an increase in the openness of the economy in Brazil.
5. Primary surplus
In addition, the primary surplus — formed by the amount invoiced from exports minus expenditure on imports — was 50% greater. The sum jumped from US$ 40 billion in 2016 to US$ 60 billion in 2021.
6. Federal collection
Federal revenue is almost 30% higher than when Dilma left the Planalto. In the accumulated 12 months recorded in August 2016, the value was just below R$ 1.5 trillion, according to data from the National Treasury. In September 2022, the sum approached BRL 2 trillion.
7. Public spending
As of June 2022, the federal government again had a primary surplus in the public accounts accumulated in 12 months, that is, expenditures became less than expenditures. The positive balance for the same interval had not occurred since November 2014 (when the global economy was still extremely favorable). In the most current data, from September, the extra value closed at practically R$ 85 billion.
8. Profit of state-owned companies
State enterprises became profitable. Last year, the net result of these companies closed at close to BRL 190 billion, 40 times the slightly less than BRL 5 billion in 2016 — and about BRL 230 billion more than the loss of BRL 32 billion registered in 2015.
9. International reservations
To mitigate the effects of monetary instabilities, the country has around US$ 330 billion in international reserves. The value appears in the most current report from the Central Bank, and represents the amount for September of this year.
10. Agribusiness
In early 2022, Brazilian agribusiness production chains were threatened by the possibility of a fertilizer supply crisis. The concerns arose because of the sanctions imposed on Russia, because of the invasion of Ukraine. The Russians are among the world’s main suppliers of this vital input for agriculture.
Through diplomacy, the federal government managed to guarantee the supply of fertilizers. As a result, Brazilian agribusiness harvests a record 270 million tons of grain in 2022 — a mark that should be surpassed in 2023, with an estimated 310 million tons for the next harvest.
In this context, meat production — including cattle, pork and chicken — continues to increase. The expected growth rates for 2022 and 2023 are 1% and 3%, respectively.
Annual meat availability per inhabitant should rise to around 3% next year. Thus, the supply per Brazilian, discounting the volume exported, will be above 95 kilos.
11. Partnerships with the private sector
The government also leaves behind a partnership program for investments with the private sector that guarantees the injection of R$ 1 trillion, between investments and grants. The extensive list involves around 150 projects, distributed in the states of São Paulo, Rio de Janeiro, Mato Grosso do Sul and Pará, and leases of airport terminals in Paraná and Pernambuco.
Also considering the proposals under study, the program’s portfolio contains 224 projects. One of them, still under analysis, is the privatization of the Port of Santos.
When Bolsonaro took office, the port of Santos, the largest in Latin America, was registering recurring losses. The balance of operations in 2018 was negative by approximately R$500 million. Now, the installation pays dividends. The accumulated net profit from January to October, for example, is already positive at R$ 430 million.
12. Continuing and finished works
The current government still continued the delayed works, started in previous administrations. An emblematic case is the transposition of the São Francisco River, which went through stoppages in several stretches.
After 15 years of embarrassment and four presidents of the Republic, the transposition that intends to guarantee water in the northeastern sertão was concluded.
Another example is the North-South Railroad. Work began in 1985, during the Sarney government. The construction of the original route, which involves 1,500 kilometers between Porto Nacional (TO) and Estrela D’Oeste (SP), should be completed by the end of 2022. Its structure was planned to be the backbone of rail transport in the Brazil.
The list also includes the Abunã Bridge, over the Madeira River, in Rondônia. Inaugurated in May 2021, it took seven years of construction.
In the panel on public works by the Ministry of Economy, around 130,000 projects started in previous governments and completed during Bolsonaro’s term are cited. Contracts of all sizes are on the list: construction and renovation of day care centers, hospitals, schools, shopping centers and other public buildings, as well as structures such as bridges, roads and railways.
This is the legacy of a more economically open country, with balanced public accounts and in line with world growth, but which depends on the austerity adopted by the Bolsonaro government to maintain itself. After being elected, Lula questioned, for example, the need to maintain surpluses, cut expenses, guarantee fiscal stability and respect the spending ceiling. Lula’s speeches suggest that his administration will follow the opposite path, towards the already known precipice of the PT.
