What we had in June and what to expect for July in the economy

The Fiscal Framework was approved with reservations, but the final approval by the Chamber of Deputies is still pending. Government hostage to Congress, leaving our economy stuck waiting for quick answers from parliament itself.

Now we move on to tax reforms. It will be? We hope that these are the next steps of the Congress.

The interest rate was maintained at 13.75%, with eyes turned to the next meeting in August, hoping for a drop.

We are back to an old way of governing, buying congressmen for approval of Executive bills.

A lot of volatility in the markets, caused by the continuation of the war and by the probable increases in American and European interest rates.

For July, the markets still tend to rely on the volatility imposed on both internal and external markets. We await the final approval of the Fiscal Framework.

The fiscal Framework came to replace the current spending ceiling, limiting the annual growth of Union expenses between 0.6% and 2.5% of the Gross Domestic Product (GDP). But will it be fulfilled?

For our Ecolitica*, we are waiting for new government guidelines, blocked by waiting for congressional approvals or a better articulation between the executive and the legislature. So we hope.

Even with the stock exchange once again seeing new horizons and the dollar stabilizing below R$ 5.00, we could have contaminations by the external and internal markets.

We follow the narrative to “diversify”, even if interest rates (SELIC) fall at the next meeting.

In the world economy, the signs are already clear that a recession is contaminating some European countries. And in an attempt to prevent advances in inflation, interest rates should rise further, setting the tone for a slowdown.

The war enters into hot moments involving not only Russia and Ukraine, but also two great powers, such as China and the USA, making the climate even more turbulent.

Hold on, the month of July promises.

* Ecolithic = Economy + Politics.