Political conflict mars economy in Brazil

Brazil’s Economy Minister Paulo Guedes said on Friday that political conflict is contaminating the economy and overshadowing positive news on economic growth and the prospect of a much smaller primary budget deficit next year.

Guedes spoke to investors as the country’s political climate became even more tense after far-right President Jair Bolsonaro’s request to the Senate on Friday to impeach a Supreme Court judge.

Critics have accused Bolsonaro of sowing doubts about Brazil’s voting system so he can question next year’s election results if he loses.

The political clashes are worsening, Guedes said.

Brazil can expect to see a budget surplus in 2023 as the economy begins to grow again, recovering from the Covid-19 pandemic, Funchal said.

But Funchal said fiscal uncertainty has been causing market turbulence in the past few weeks, with the real currency weakening against the dollar.