Halister News

(Bloomberg) -- Measures aimed at capping public spending increases and boosting investments in Brazil’s oil may advance in near-term, analysts at political-consulting firms in NYC and Brasilia say.

• Spending-cap bill may be approved by a Lower House commission in coming weeks, before the next BCB rates decision, Joao Augusto de Castro Neves, analyst at Eurasia says in a interview by phone
  • Bill could be fully approved, in House and Senate, before the end of the year
  • “All the signs are that the bill will advance fast”
• NOTE: Spending cap could be important sign for BCB, which has pointed out that whether it cuts rates will depend on improvement in the fiscal outlook, along with inflation slowdown
  • Bill aimed at freeing Petrobras of obligation to operate all pre-salt fields may also advance fast and be approved this year, Lucas de Aragao, partner at Arko Advice, says
  • Measure is “extremely important” for investors that may enter the auctions of licenses to explore pre-salt fields in 2017
  • Eventual Temer decision to delay dispatch of the pension regime reform to Congress to after municipal elections is not a big deal, the analysts say
  • Sending pension regime bill now or after election (the first round of which is this weekend) will make no- difference for the whole reform approval calendar, expected only for 2017
  • While the consulting firms are optimistic on approval of spending cap, pension and pre-salt measures, they say government efforts are needed to avoid changes in the reform bills that could weaken their impact on the economy