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Congress Approve 2022 Budget Guidelines Before Recess

BRAZIL
  • The approved text, which sets the parameters for next year's budget, foresees that the 2022 fiscal target will be a primary deficit of 170.5 billion reais, or 1.9% of GDP. Estimated growth for the 2022 was maintained at 2.5%, with a minimum wage of 1,147 reais. The text also tripled the amount of money parties can spend in next year's elections. (BBG)
  • The recess will run until the end of July. With limited developments expected on the political front during the recess, especially with regard to the Covid probe, headline noise may diminish.
  • The Real is set to lead EMFX winners this week, with BRL roughly 3% higher amid higher government growth forecasts and sustained support from an aggressive tightening cycle forthcoming.
  • Friday 23rd July will see the next IPCA-15 data before the Copom meeting on Aug 4th.

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