For 95% of the financial market, the government will not be able to close the primary deficit next year. The number appears in a Genial/Quaest survey released this Tuesday, 19th. Only 5% of the 87 investment fund professionals interviewed expect the fiscal target to be met in 2024.
Even if all the measures announced by the government to boost revenue in 2024 are approved, only 14% of those interviewed expect the package to eliminate the deficit in public accounts.
86% say that the fiscal target will be missed regardless of the revenue increase package.
Among the measures, the taxation of exclusive funds is considered the easiest to advance in Congress: 46% of those interviewed see a high probability of it being approved.
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The approval of the end of the deductibility of interest on equity (JCP) is seen as “very likely” by only 27%.
If the government is unable to approve the package, the majority of the market (53%) expects the Executive to seek new measures with an immediate effect on increasing revenue. Another 37% expect to abandon the zero deficit target, and 10% foresee an increase in tax rates.
Articulation
Between July and September, the market became more skeptical regarding the government’s ability to advance its priorities in the Legislature. The proportion of those who consider the government’s capacity to approve its agenda in Congress to be low grew from 24% to 27%, and those who see its capacity as high fell from 27% to 20%. The assessment that capacity is regular increased from 49% to 53%.
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For 56%, the entry of the PP and the Republicans into the government – through the appointment of André Fufuca to the Ministry of Sports and Silvio Costa Filho to the Ports and Airports portfolio – will lead to an increase in the capacity to approve projects from the government. Another 44% say that the change will not change the situation.
Assessment of the Lula government
The proportion of the financial market that positively evaluates the government of the President of the Republic, Luiz Inácio Lula da Silva, fell 8 percentage points between July and September, from 20% to 12%, according to the Genial/Quaest survey. During the period, the negative evaluation increased by 3 percentage points, from 44% to 47%, and the regular evaluation increased by 5 points, from 36% to 41%.
This worsening was manifested most strongly in the reading of the work of the Minister of Finance, Fernando Haddad: after having increased by almost 40 percentage points between May and July, the positive evaluation of the minister fell by almost 20 points in this reading, from 65% to 46% . The negative evaluation of Haddad grew 12 points in the period, from 11% to 23%, and the regular evaluation increased 7 points, from 24% to 31%.
The proportion of market agents who see economic policy in the wrong direction jumped 19 percentage points between July and September, from 53% to 72%, while those who see it in the right direction fell from 47% to 28%. As a result, the proportion of those who expect the economy to improve in the next 12 months has fallen (53% to 36%), and the proportion of those who foresee a worsening has increased (21% to 34%)
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For 57%, the main problem hindering the improvement of the economy today is the lack of a fiscal policy that works – in July, 45% cited the criterion.
Other points mentioned were electoral interests (19% to 22%), low education and productivity of the population (21% to 15%) and high interest rates (11% to 6%).
The ratio of those who believe that the government is concerned about controlling inflation grew from 34% in July to 42% in September. During the period, those who consider that the Executive is not concerned with the issue fell from 66% to 58%.
Trust
In addition to the worsening assessment of Haddad’s performance, market agents also reduced their confidence in the minister: between July and September, the proportion of those who said they had little or no confidence in the head of the Treasury increased from 40% to 48%, while those who say they trust a lot fell from 13% to 10%.
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On the other hand, trust in Lula remained practically stable: those who say they trust the president little or not at all went from 95% in July to 91% in September, and those who say they trust him a lot fluctuated from 1% to 2%. The ratio of those who trust the agent more or less went from 1% to 2% in the period.
The survey interviewed 87 investment fund professionals based in São Paulo and Rio de Janeiro.
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The post For 95% of the financial market, the government will not be able to eliminate the deficit in 2024, says research appeared first in Jornal de Brasília.
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