Brazil’s stock market falls not believing President’s promises
2023.01.02 10:51
Brazil’s stock market falls not believing the President’s promises
Budrigannews.com – Markets in Brazil gave President Luiz Inacio Lula da Silva’s first full day in office on Monday a negative start after he promised to put social issues first and ordered a fuel tax exemption extension that broke the budget.
In morning trading, the real currency lost 1.5% against the dollar, and the benchmark Sao Paulo stock market index fell 3.24 percent before noon. Petrobras, a state-owned oil company, saw its shares fall by 6%.
Lula pledged in speeches he gave at his inauguration on Sunday in Brasilia that ending hunger and poverty would be “the hallmark” of his third presidency, following his previous two stints as president, from 2003 to 2010.
In October, Lula narrowly defeated former far-right President Jair Bolsonaro, reversing South America’s largest nation back to the left.
On Monday, Lula trained priests to renounce moves toward privatize state organizations taken by the past organization, including studies to sell oil organization Petrobras, the Mail center and state telecom organization EBC.
He signed a decree on Sunday that extended the federal tax exemption for fuels. His predecessor had passed the measure to lower their costs before the election, but it will cost the Treasury 52.9 billion reais ($9.9 billion) a year in fiscal income.
According to a decree that was published in the official gazette on Monday, the federal tax exemption for fuels will last for one year for diesel and biodiesel and for two months for gasoline and ethanol.
The new Cabinet was divided when Economy Minister Fernando Haddad said that the waiver would not be extended. However, Senator Jean Paul Prates, who is expected to become Petrobras’ chief executive, said that the extension would go on.
The tax issue divided the new Cabinet in the beginning.
Monday, Haddad stated that he would suggest a new fiscal anchor to restore public accounts. In an effort to calm market jitters, he stated, “We are not here for adventures.”
Lula, who served two terms and helped millions of Brazilians escape poverty, lambasted Bolsonaro for allowing hunger to return to Brazil and wept when he told supporters on Sunday that poverty had once again increased.
Reuters reported on Sunday that allies claimed that Lula’s 580 days in prison were the cause of his newfound social conscience.
More than a dozen heads of state who were present at his inauguration met with Lula on his first day in office.
The meetings began with the King of Spain and continued with South American presidents, including leftist leaders from Argentina, Chile, and Bolivia, as well as Cuban and Venezuelan representatives and China’s Vice President Wang Qishan.
On Sunday, Lula made one of his first decisions by telling his Cabinet to look into Bolsonaro’s decision to put some of the documents in his administration under a 100-year seal of secrecy.
Lula stated in his inauguration address to Congress that he was not seeking retribution and that any crimes committed under Bolsonaro would be prosecuted in accordance with the law.
Legal experts stated that Bolsonaro’s departure for Florida 48 hours before the end of his term protected him from any immediate legal risk after losing presidential immunity. He is currently the subject of investigations into his anti-democratic rhetoric and handling of the COVID-19 pandemic.
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