© Reuters. Santander warns about investment volatility in Brazil for 2022
Sao Paulo, Dec 8 (.) .- The manager Santander (MC 🙂 Asset Management Brasil warned this Wednesday about the “volatility scenario” looming for investments in Brazil in 2022, given the uncertainty of the October elections and the “worrying” fiscal situation.
“The biggest challenge investors are going to find over the next year will be a scenario of volatility,” Carlos André, CEO of Santander Asset Management Brasil, the investment fund manager of the Spanish bank, said in a meeting with journalists. in the South American country.
The executive warned that in this final stretch of 2021 there is a “trajectory of increased risk perception” that will continue in 2022, with the country’s presidential, regional and legislative elections, in a highly polarized environment.
In fact, the electoral appointment is presented as a “strong component” that “must bring volatility for better or for worse”, which will depend on the economic agenda presented by each candidate “regardless of the name or political party” of the latter, according to André’s analysis.
All the opinion polls published to date give former president Luiz Inácio Lula da Silva as the clear favorite for the presidential elections in October 2022, followed by the current head of state, the far-right leader Jair Bolsonaro.
In fact, depending on how the market interprets the economic plans of the candidate who wins the elections, André does not rule out a last quarter of 2022 with a financial market at full steam.
At this point, he considers that one of the points that could mark a point of division is fiscal policy and how the new Government is going to address this situation in a context of “fragility” of the country’s public accounts.
In addition to elections and fiscal risk, other factors that can bring volatility, according to André, are high inflation, which will close 2021 in double digits, with a decline expected in 2022 although also above the official goal, and as a consequence of this, an even higher basic interest rate.
He also cited the weak growth of the Brazilian economy for 2022, which will be 0.5%, according to Santander, without forgetting the pandemic factor, which can still generate “some volatility.”
Brazil is one of the countries hardest hit by the covid-19 pandemic, along with the United States and India, accumulating 616,000 deaths associated with the disease and 22.1 million infected since the outbreak of the virus.
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