Interest rates in the United States, still high, are sucking investments from rehabilitated countries. In Brazil, Lula’s behavior offers additional pretexts for foreign investors to get out. Since the beginning of the year, around R$22 billion has fled the Brazilian capital market. A similar thing has not been seen since 2020.
Last year, Lula expressed his desire to renationalize Eletrobras. Afterwards, he shocked the capital’s owners by trying to impose former PT minister Guido Mantega in charge of the former state-owned company Vale. At the beginning of March, he devalued Petrobras’ shares by R$55 billion by stopping the payment of extraordinary dividends to shareholders. Instead of explanations, he gave investors a nickname: “The market is a voracious dinosaur.”
The Ministry of Finance dreams of increasing the investment rate in the Brazilian economy from 16.5% of GDP, registered in 2023, to something close to 25%. If you don’t want to help, Lula doesn’t need to get in the way. She had two terms to learn that the market is governed by the law of supply and demand, not by the language of presidents. It was imagined that, on his third visit to the Planalto, he would exclude state interventionism from his feijoada.
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