Predictions and Evaluations – 2017 and 2018

Predicting the year ahead and then evaluating how precise my forecasts were last year always gives me pleasure, even if it’s a bit perverse.

Last year, I posted in January, “2017-Predictions for Brazil –Happy New Year???”(https://allabroadconsulting.wordpress.com/2017/01/04/2017-predictions-for-brazil-happy-new-year/)

My best prediction for 2017 was that Temer could be removed from office because of his lack of legitimacy and unpopularity.  However, I said that people would have to take to the streets for this to happen. Indeed, Temer could have and probably should have lost his job with the JBS recording and the bag full of money carried by his lackeys.  But it did not happen because no one pounded on pans or took to the street.  Certainly people were and are generally disgusted but prefer not to spend the energy mobilizing, marching and chanting.  Dilma fell partially because of the pressure from the street, but Temer remains because he proved a better politician in that he was able to bend a venal Congress to his will through favors and offers of protection.  And the population just looked on and essentially said “Ok, there is nothing more we can do.”

I also mentioned the mayors that took office in January of last year.  Noting that while they (especially Doria in Sao Paulo and Crivella in Rio), played populist politics to get elected and tried to represent something new, neither was successful.  Doria, after initially pursuing a presidential hope, has become more modest in his aspirations.  Crivella has almost dropped out of sight and the Cariocas are only sometimes complaining about his absence.  In other words, “Who cares?”.

It was easy to be skeptical about progress in Brazil in 2017. And indeed it was another of those years that as you put them together lead to a lost decade.  Certainly the lack of political mobilization was uninspiring. It was sad to see Congressmen vote to absolve and protect themselves.  On a less pessimistic note, the economy stopped moving backward and showed minor signs of recovery where negative cycles eventually end.  TheTemer government boasted about low inflation and the lowest real interest rates ever.  With the end of the depression, foreign capital continued to flow into Brazil seeking deals in oil, gas, and alternative energy, especially wind.  While Brazilians lack the will to invest, foreigners with a long view and a sense of opportunity are taking chances given the capital made available by the generally positive world economic scene.  Investment capital is out there and seeking attractive and profitable projects.

A year ago, I concluded my iffy thoughts on people feeling empowered to make a difference.  It didn’t happen.  In 2018, the people will vote.  There will be winners and losers, so in this light, let me make 10 predictions.

Here we go:

1. Lula will not win the presidency either because he will be condemned in his appeal or he will lose outright to a more centrist politician.
2. Barring a health issue, Temer will finish his term and seek to define his successor and his party and the PMDB will continue to have weighty and oligarchic influence.
3. The economy will grow in 2018 between 1 and 2 percent. This is less than the consensus prediction by Brazil’s central bank.  Poor but an improvement.
4. There will be little renewal in Congress. While Brazilians claim to hate their politicians, they are re-elected and the campaign finance/electoral reform passed in 2017 favors those currently in elected positions.  Furthermore, pension reform will be kicked down the road to 2019.
5. Inflation will pick up with money being spent to influence the election as well as kitchen gas, gasoline, electricity and health costs all running ahead of official inflation numbers.
6. The Selic interest rate will once again go to 8% or more from the current record lows.
7. Brazil will continue to be a country at war with itself. There will be over 60 thousand homicides and another similar number of traffic deaths.
8. The World Cup in Russia will be a great distraction and Brazil will finish in the top 4 but will fall short of winning the Cup for the sixth time.
9. The military will not intervene and Bolsonaro’s presidential candidacy will fail. Alternative candidates such as Joaquim Barbosa, Marina Silva, Henique Meirelles, Ciro Gomes, Luciano Hulk or Joao Doria will also fizzle.
10. Geraldo Alckmin of Sao Paulo will win the presidency much to everyone’s consternation.

As predictions go, at least these are measurable and verifiable.

Happy 2018 e para o Brasil Happy 2019 que 18 será mais um ano perdido.