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LatinNews Regional Monitor: Brazil & Southern Cone - 28 June 2018

Brazil enters the doldrums as election approaches

Development: Brazil’s federal congress delayed until 3 July a vote to fast-track two key energy bills that could have raised over R$100bn (US$26.1bn) for the cash-strapped federal government.

Significance: There’s increasingly little chance that the legislature will pass anything before congressional recess begins in mid-July. By the time congress resumes, the official campaigning period for the 7 October general election will have almost begun. With the new government only set to take office in January 2019, the second half of this year is unlikely to see any major policy changes but may experience further economic shocks from abroad. Already in the first half of this year, foreign investors have taken out over R$10bn from the São Paulo stock market (Bovespa), the highest amount since 2008. Yesterday, although Brazil was beating Serbia in the Fifa World Cup, its own currency was also taking a beating, with the real down around 2%, bringing its depreciation for the year to date to over 14%.

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