1. Central Bank maintains basic interest rate at 10.5% per annum

On Wednesday, the Central Bank’s Monetary Policy Committee (COPOM) unanimously decided to maintain the basic interest rate (Selic) at 10.5% per year.

The Central Bank again cited fiscal policy as the main factor influencing COPOM’s decision. The government of Luiz Inácio Lula da Silva has set a goal of zero deficit for 2014 and 2025, but there are market concerns about the feasibility of this objective.

This is the second time the Central Bank has decided to keep the rate unchanged, halting a cycle of cuts that began in 2023. The decision displeases the government, which has criticized the current head of the monetary authority, Roberto Campos Neto, who was appointed by the previous administration.

G1: Copom mantém Selic em 10,50% ao ano, em decisão já esperada pelo mercado

2. Unemployment rate drops to 6.9%

In the second quarter of 2024, Brazil recorded an unemployment rate of 6.9%, according to the National Household Sample Survey (PNAD) conducted by the Brazilian Institute of Geography and Statistics (IBGE).

This is the lowest level of unemployment for the period in 10 years, with a new record number of people working, as well as an increase in income.

According to the survey, compared to the previous quarter, which ended in March, there was a 1 percentage point decrease in the unemployment rate, which was 7.9%. In the same quarter of 2023, the rate was 8%.

IBGE: PNAD Contínua: taxa de desocupação é de 6,9% e taxa de subutilização é de 16,4% no trimestre encerrado em junho
CNN Brasil: Desemprego cai para 6,9% no trimestre até junho, menor nível para o período desde 2014, diz IBGE

3. To meet fiscal target, government announces R$ 15 billion budget freeze

On Monday, the government announced the publication of a decree freezing BRL 15 billion of the federal budget.

In absolute numbers, the Ministry of Health was the most affected, with BRL 4.4 billion frozen; followed by the Ministry of Cities, with BRL 2.1 billion; Transport, with BRL 1.5 billion; and Education, with BRL 1.2 billion. Proportionally, however, the Ministry of Women and Racial Equality was the most affected.

The goal of the economic team is to meet the zero-deficit target, as established by the fiscal framework, in which expenditures can only grow up to 2.5% per year, excluding inflation.

Valor Econômico: Entenda a diferença entre bloqueio e contingenciamento de recursos do Orçamento
O Globo: O decreto do bloqueio do Orçamento sai amanhã. Veja os principais pontos

4. Brazilian Artificial Intelligence plan launched in Brasília

On Wednesday, during the opening of the 5th National Conference on Science, Technology, and Innovation in Brasília, President Lula launched the Brazilian Artificial Intelligence Plan (PBIA).

According to official information, the plan outlines guidelines for research and development of Artificial Intelligence, as well as the regulation of practices to ensure the safety and privacy of citizens.

The proposal aims to equip Brazil with advanced technological infrastructure with high processing capacity, powered by renewable energy, including the new supercomputer.

The document, which is expected to be published via decree, has not yet been officially released.

Ministério de Ciência, Tecnologia e Inovação: Plenária esclarece proposta do Plano de Inteligência Artificial entregue ao presidente Lula
Correio Braziliense: Lula lança Plano Brasileiro de Inteligência Artificial nesta terça

5. Brazil attempts to push for the taxation of the super-rich at G20

The G20, during a meeting in Rio de Janeiro on Sunday, issued a joint declaration aiming to tax the super-rich. However, the meeting did not reach a definitive agreement on the creation of a global tax for this purpose.

Brazil, which is leading the group, suggested that billionaires be taxed at least 2% of their wealth annually. This measure could generate additional revenues of $200 billion to $250 billion, which could be used to combat poverty and protect the climate.

Disagreements may hinder the progress of the measure. One of them is the issue of the best forum for discussion and implementation: whether through the United Nations or the OECD.

CNN Brasil: G20 concorda em tratar de tributação de super-ricos, mas diverge sobre melhor fórum