Brazil Pulse - Evaluation of Temer’s Administration Worsened Again - August 2016
The country's direction indicators seem to point to a timid upward bias. On the other hand, Temer's administration evaluation has worsened. As Dilma’s trial by the Senate approaches*, the approval and disapproval indicators for both, acting president Michel Temer and Dilma Rousseff, remain stable in very negative levels. Consumer Confidence Index remains at 68 points and it stagnates after three months of small incremental increase. Perspectives for the next 6 months give small signs of possible improvement.
Context
Brazil at a standstill.
In August, Brazil's direction was considered wrong for 87% of people, a rate 2% lower than recorded in the previous month and 4% lower than that observed in April, month of impeachment vote in the House of Representatives. Even though this index seems to be in a timid bias towards improvement, its level is still ridiculously negative.
There are some factors that contribute to the fact that Brazilians see their country in the wrong direction and, in the last few months, Pulso Brasil's data has been interpreting and explaining this context. We have already outlined here that this situation will be reverted in a gradual way and that more significant results will only be seen from 2017, after the consolidation of the impeachment process and the course of the Lava Jato (carwash) investigation.
This process has put Brazil at a standstill and its definition – regardless of its outcome – will close a cycle of instability and political turmoil. A new cycle will then begin, where the country will have to discuss in a mature manner, the necessary reforms it has to do - including the political reform.
Evaluation of Temer’s administration worsened again in August.
In August, Temer's administration was considered bad or very bad for 49% of Brazilians (against 48% in July and 43% in June). Those who did not know how to answer add 12%, against 16% in July and 22% in June. The management was considered "regular" for 31% of the population, against 29% in July and June. Finally, the positive ratings (excellent or good) were 8% in August, compared to 7% in July and 6% in June. That is, in the last three months Temer's administration has been forming opinions, but they do not converge to positive indicators.
Pulso Brasil's data continue to confirm that the public disapproves his management in general, more strongly in key areas for the country, such as beating inflation and unemployment, for example.
There is a consensus that structural reforms are urgently needed, and in order to these to be placed on the agenda, the support of Congress and public opinion are needed. The latter, at least so far, has shown little receptive response to the performance of Michel Temer's management.
Political barometer
How to lead the changes in a country lacking leaders?
Political Barometer indicators of President Michel Temer remain highly negative in August.
With so many expectations of reforms, whether from public opinion, or the market or industry leaders, any possible definitive management of Michel Temer will need to communicate clearly and objectively with the public about the country's main problems and solutions – some of them through unpopular measures.
Pulso Brasil has been monitoring the country's agenda for months and the results clearly show that when talking about structural reforms, Brazilians fear losing acquired rights and/or they find greater difficulty in obtaining them. In addition, there is great ignorance about the content of such reforms and how it can affect people.
Finally, we should remember that we live in a moment of institutional crisis and weakening of political leaderships. The reconstruction of the dialogue with civil society will require a proposed agenda – the challenge of a potential Temer's administration will pave this way after more than 100 days of interim government without the long awaited "management shock" and with a low approval rates regarding the topics considered most important for the Brazilians.
Economic context
Consumer confidence: a light at the end of the tunnel?
Consumer confidence did not show consistent recovery since the removal of Dilma Rousseff. In April, the month of the impeachment vote and her consequent removal, the DCI was 64 points - the lowest of the historical series. Three months later, the index is 68 points, i.e., Brazilians have still not regained their confidence in consuming.
This is for the following reasons:
- political scene uncertainty;
- confidence crisis in institutions and political leaders;
- collapsed economic environment and without impacting prospects for improvement in the short term.
However, for the first time in months, the evaluation of personal financial situation in the short term is rather more positive than negative: 30% believe that after 6 months their financial situation will be better, compared to 27% who believe it will be worse. Another 41% think that their situation within 6 months will remain the same.
It is too early to say whether we have already resumed the path of optimism – because indicators for the commitment to a larger purchase (e.g. car, property) or even a medium sized one (e.g. stove, fridge) remain stagnant at very negative levels.
The light at the end of the tunnel, however, is a first sign of improvement in the confidence indicator in employment in the future, a key challenge for whoever will be seating in the president´s chair from September.
