December 8, 2022

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What will the third period look like?

Lewis Stolberger commented that he sees “inflation and interest rates going in one place, but the stock market and the exchange rate going elsewhere.” (Photo: Reuters/Amanda Perubelli)

Director Louis Stolberger, from the legendary green backgroundHe said he saw a “paradigm shift” in the final elections of former President Lula in terms of what had been achieved in economic policy since 2016.

“Given that the country is not growing, the market is looking forward [um novo governo Lula] Like the government that will spend,” the director said at an event in BTG Charter Rouge on Wednesday (23).

Stuhlberger had already said earlier this month Who is the favorite ex-president in the elections?. Lola is the current Polls leader for intent to vote.

For the director, Lula would have preferred the fact that Brazil did not grow with reforms after the Temer government. “The growth has not been achieved for several reasons,” he said, noting that the state could invest 1% of the GDP more than the current level.

Stuhlberger commented that Lula’s government took over in 2003 with total debt minus reserves of 60% of GDP and delivered at 40% of GDP. “It wouldn’t be a legacy if it wasn’t [um governo] responsible,” he said.

However, the director noted that Lula’s government increased federal expenditures by 6% annually plus inflation, in a continuation of the FHC government.

Expense increase

During the event, Stuhlberger commented that today’s inflation is no longer compatible with a scenario in which Brazil increases expenditures. “Maybe we should change the inflation target,” he said.

For the manager, the market says that “we will have to live with Brazil not necessarily sinking, but with inflation and higher interest rates.”

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He stressed that moving inflation from 10% to 6% would be “easy,” but it would be difficult to raise it from 6% to 3%. “I think we will have to deal with this,” he said, at a time when the central bank is raising the policy rate to Reducing price escalation.

Stuhlberger’s assessment follows the same line as the former BC director, FGV professor and managing partner of Sarpen Quant Investments, Sérgio Werlang. “So much of the difficulty in getting to the 2023 target is that it’s gone down so much,” The expert told the Money Times in January.

Verde’s director also commented that he sees “inflation and interest rates go one place, but the stock market and exchange rate go elsewhere” with the government eventually changing.

“The market and foreigners do not have a negative opinion of Lula,” he said. “Entrepreneurs will be happy because the financial measures take the money into the hands of the consumer.”

Verde’s fund, which has generated a cumulative return of more than 18,300% since its inception in 1997, fell 1.1% in 2021, after suffering from bets on Brazilian stocks – and was the second lowest annual level in its history.