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A blind flight. This is how economists, business lawyers and investors define the current economic situation: in the two months of the election, the scenario is so indefinite that it is difficult to whether, from 2019, Brazil will have a left or right government, a reformist president or ready to expand the size of the state. Faced with this, the economy, which is already idling, should remain neutral until October. This is bad news, as it reinforces the paralysis of sectors, puts investments on hold, and may further reduce the forecasts for the 2018 gross domestic product (GDP).
The slowness of the economy is evident in reports such as Focus, which is the average forecast for the country GDP growth forecasts, which reached nearly 3% in February, have steadily declined since then and now stand at 1.5%. Although the data already show the effect of the problems up to now, the election could worsen the situation, according to the economist Álvaro Bandeira, of Banco Modal. "I think we can fall below that, stay at 1% or 1.2%," he says. "This is a very bad result because it is below the level needed to avoid the decline in per capita income, which is about 2.5%."
Mário Mesquita, chief economist of Itaú Unibanco, also believes that the election could be another stressor for the economy. At the beginning of the year, the bank team was even forecasting an advance of about 3% of national GDP. This month, it has revised downward its forecasts and is already working with a 1.3% lower index Focus
The reluctance of the investor to make decisions is understandable, according to the badessment M & A lawyer Carlos Mello, from the Souza, Mello and Torres offices, since the political scenario has the greatest indefiniteness since the campaign that led to Lula's first victory 16 years ago. "I see that Brazilian business people are reluctant to make badociations now, to commit to results or even to attract a new partner," he says. "Three foreign funds were looking for one of my clients in the logistics hangars area, but he thinks it's not the time to buy land and build a hangar, to put capital at risk."
After two bad years, mergers and acquisitions had a significant advance in 2018 – 15% over last year's result. According to Rogério Gollo, a PwC partner, expectations have already been exceeded. From January to May, there was a discreet growth of 3.3% compared to the same period in 2017.
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