Investors are increasingly optimistic about Brazil’s economy

When Luiz Inácio Lula da Silva was elected as Brazil’s president last year, investors shuddered. Many feared a return to the fiscal profligacy that characterised the previous government of his Workers’ Party, which ended in 2016 in a deep recession. Yet six months after he took office, markets are warming up to Lula’s administration. In a recent poll of 94 Brazilian fund managers and analysts, just 44% had an unfavourable view of the government, down from 90% in March. On July 26th Fitch, a ratings agency, upgraded Brazil’s long-term foreign-currency debt for the first time since it was downgraded in 2018.