The popularity of Dilma Roussef, the president of Brazil, is at its highest level since taking office, a little over a year ago, buoyed by her handling of an economic slowdown and tough stance against corruption, a poll showed this week.
Rousseff’s approval rating surged to 77% at mid-March from 72% in December, according to the survey carried out by Brazilian polling firm Ibope. That puts Rousseff, who had never run for public office before winning the presidency, among the most popular democratically elected leaders in the world.
Presidents Fernando Henrique Cardoso and Luiz Inácio Lula da Silva, who preceded her in the presidency had popularity rates in the 40s, at the same time in their first mandate.
Rousseff, 64, was sworn in as Brazil’s first female president in January 2011, succeeding her hugely popular political mentor Lula da Silva, who left office with an even higher approval rating than Rousseff’s, just below the 90% mark.
Lula, a folksy former union leader, presided over an economic boom that lifted more than 20 million Brazilians out of poverty, with the economy expanding at a blistering 7.5% in his last year in office.
Latin America’s largest economy has cooled under Rousseff, hit by fallout from the European debt crisis and slowing growth in China, expanding a disappointing 2.7 percent in 2011. But Rousseff has remained popular throughout thanks to strong job growth and rising wages, which have helped cushion the impact of the economic chill.
Rousseff, a career technocrat who lacks Lula’s charisma, has also benefited from the perception that she is being tough on corruption, a malady that has long plagued Brazilian politics. Six of Rousseff’s ministers were forced to resign in her first year in office over corruption allegations.
According to a special report on Brazil, Fitch Ratings believes that the country’s current slowdown is cyclical in nature and that economic growth is likely to return to its potential rate.
Fitch notes that Brazil’s sources of economic growth have not suffered a structural deterioration in their growth trend and, to the contrary, continue to increase at a sustained pace, which is notably the case for Total Factor Productivity.
“An established record of prudent economic management combined with structural reforms such as privatizations and trade liberalization have boosted productivity gains and capital stock accumulation, leading Brazil’s potential growth rate to increase to around 4% from its average 2.3% in the 1990s,” said Shelly Shetty, Head of Fitch’s Latin America Sovereigns Group.
“Higher domestic savings and investment rates, a reduction in cost of doing business and further development of long-term credit markets are needed to improve Brazil’s growth prospects further,” added Shetty.
The medium-term growth trajectory needs to improve to enhance Brazil’s overall wealth and improve fiscal flexibility over time.
With the overheating of the economy prompting authorities to tighten monetary and fiscal policies and Brazil facing an unfavorable external environment, GDP growth decelerated sharply to 2.7% in 2011 from 7.5% in 2010.
Aggressive monetary easing, the elimination of certain macro prudential measures aimed at curbing credit growth and a significant increase in the minimum wage should allow for a moderate economic recovery amid global sluggishness, with growth forecasted to reach 3.2% in 2012.
Brazilian farmers will likely plant at least 26.2 million hectares with soybeans in the next crop, up 1.1 million hectares from the current 2011-12 crop, forecaster Agroconsult said.
The acreage would be a record for Brazil, the world’s No. 2 producer of soybeans.
Agroconsult director Andre Pessoa said soybean planting is expanding rapidly in the northern and northeastern states of Maranhão, Tocantins, Piauí and Bahia. Brazil’s top soybean-growing state of Mato Grosso continues to expand its planted acreage as soybean farmers move onto degraded pasture land.
The expected increase in planting is good news for the recovery of Brazil’s soybean crop which reached a record 75.3 million tons and 24.3 million hectares in 2010/11 but this harvest (2011/12) is forecasted to fall to 65.2 million tons because of a severe drought in the in southern states.
The latest estimate is down by nearly 2 million tons from the 67.1 million tons forecast in March, said Agroconsult.
Thanks to strong exports of the 2010/11 crop late last year, Brazil could displace the United States as the largest exporter of soy, one of the world’s most important sources of protein.
The forecast was the culmination of crop tours by several teams which covered 60.000 kilometers of Brazil’s grain belt in the past several weeks.
Agroconsult’s lead analyst, Andre Pessoa, said Brazil’s corn crop may surpass the country’s soybean output this year. He cited expectations for greater area and good yields from the second, or winter, corn crop that is now winding down planting.
Agroconsult forecast Brazil’s total corn output this year at 64.6 million tons, up from the 63.7 million it projected in March.
Brazil became the world’s third largest exporter of corn in recent years, shipping around 8 million to 10 million annually