There will be excitement in markets, and it will be largely justified. Flávio Bolsonaro will have greater latitude than expected to pursue his agenda. This will begin with negotiations with Congress for an amnesty for his father Jair Bolsonaro, currently under house arrest. But given the scale of the result, Bolsonaro should have considerable political capital left over to address Brazil’s biggest economic vulnerability today: a nominal budget deficit that approached an alarming 10% of GDP in recent months. Respected economic officials who had previously been shy about joining Flávio’s team may now lose their inhibitions.
Combine this new policy outlook with Brazil’s other assets, including rising commodity prices, rising oil exploration, and a very strong agribusiness sector, and there are reasons to think good times are ahead for Brazil.
Read more quick reactions to Sunday result from @traumann and Alessandra Ribeiro here:
americasquarterly.org/article/reaction-fla...