Bolsonaro’s reform agenda, BCB rates hikes

The plans outlined by Brazil’s likely next president, Jair Bolsonaro, to tackle some of the causes of Brazil’s productivity problem should be welcomed. But his apparent waning commitment to fiscal and welfare reforms suggests that the chances of a significant rise in savings, investment and productivity are low. Meanwhile, although markets have pared back expectations for a rate hike at October’s Copom meeting, there is still a high chance that the Selic rate will be raised.