Halister News

(Bloomberg) -- Political uncertainties are failing to stop approval of President Temer’s proposals by Congress, helping Brazil market remain confident in new government, Joao Castro Neves, analyst at Eurasia Group, said in interview in Sao Paulo.

• “Since the economic team remains cohesive and the main political players keep acting, the Carwash probe will not cause deadly harm to the approval of reforms”
• Temer’s main priority is to gain investors’ confidence; his political team “knows how to handle Congress”
• NOTE: Senate’s approval last night of Ilan Goldfajn as new BCB governor marked the 3rd Temer victory in a row in Congress
  • In case of arrests of some senators, it could cause some “distraction” in Congress’s agenda, as it would be necessary to elect new leaders; reforms can continue to come up for vote, though, albeit at a slower pace
  • Fast-track approval more likely for some microeconomic reform proposals such as the change in rules for pre- salt oil exploration, strengthening of regulatory agencies and responsibility law for state-owned companies
  • Among reforms of the “macro agenda,” the limit for public spending is likely to pass; others such as reform of social security, labor and taxes tend to be approved at a more sluggish pace