‘The moment is one of pessimism for the economy’, says Daoud about the current situation

Commentator Miguel Daoud is pessimistic about the direction of the economy and politics in Brazil. He notes that the current water crisis, the lack of containers at the ports and the stoppage of the Tietê waterway are factors that aggravate a general negative scenario, marked this week by the prospect of new demonstrations in Brasília.

“In the short term, how are problems solved? Bringing a positive scenario to the present. The economic dynamics, in order to solve the conjunctural problems, demand time for this to begin to happen. Now, you anticipate that time if you bring a more positive scenario into the present. But things as they are do not allow this scenario to come to the present”, comments Daoud.

“I’ll give you an example: this week is a week of expectations in relation to some manifestations, we are seeing this manifesto that was prepared by bankers, businessmen, which was also postponed. So, in the political scenario, you have a lack of optimism that starts to wear down the economy, with a rise in the dollar. This is all consolidating throughout the social, political and economic dynamics and brings a more pessimistic scenario”, exemplifies the commentator.

Daoud sees no solution to the water crisis, and believes there will be rationing or blackouts. “Thus, my concern — because the world will continue the way it is, now it’s fine, sometimes it’s bad — is that, in the case of the country and the rural producer, costs will increase a lot”, he says. “This water crisis, for example, now had a meeting to prevent the increase of almost 50% in flag two, which will greatly penalize consumers. I don’t think it will be announced this week,” he adds.

“Inflation, after it has a dynamic, creates an upward inertia of prices in the future, so in order to improve inflation we have to resolve, in the present, this dynamic — something that is not happening. This water crisis, without a doubt, will fall into rationing or a blackout. The lack of containers and the stoppage of the Tietê waterway also increase the cost and aggravate the crisis”, observes Daoud.

“In other words, we have a very complicated scenario, without any political-economic situation to bring optimism to the present and dissipate this negative scenario. It’s a very complicated situation and Brazil is socially fragile. Brazilians will suffer, especially the most humble”, concludes the commentator.