After President Michel Temer came into office, the Brazilian economy was reorganised and began once again showing the results expected by society. At the beginning of the year, for the first time after eight quarters of consecutive decline, the country has finally grown again. The measures adopted in just over a year of the new administration led to a resumption of employment, valuation of companies in the stock market, falling inflation and increased confidence in the economy by investors, business owners and families.

President Temer, in an article recently published in Brazilian newspapers, stated that "Brazil cannot stop". In order to continue these advances, the government has adopted microeconomic measures that facilitate the lives of entrepreneurs and consumers. In addition, he has sent Congress a bill for pension reform and another to modernise labour laws.

Faced with all these changes, a number of relevant indicators for the economy saw significant improvements since the beginning of the Temer administration. In February 2016, with the economy in disarray, inflation reached 10.36% in year-to-date terms - well above the tolerance limits of the inflation target.

After adjustments in public accounts and other measures, the official indicator that measures cost of living in Brazil has fallen sharply. It went from 10% to 3.60% - the lowest since May 2007, when the Broad Consumer Price Index (IPCA) stood at 3.18%. In practice, the decrease in the IPCA means more food on the table for consumers, who also have more leeway on how to plan their spending.

At the same time that it was able to bring down inflation, the government created the necessary conditions for the Central Bank to reduce the basic interest rate (Selic). With the creation of the spending ceiling, the public budget became more organised and reduced the pressure it exerted on the cost of living of Brazilians. This scenario has made room for the Central Bank to cut interest rates, which is already reflected in loans and financing with lower rates for consumers and companies.

More investments

The measures that reorganised the economy and reduced inflation and interest rates also created a better investment environment. The risk of the country defaulting on investors, the so-called Brazil Risk, plummeted in a year of Temer administration. Before the president's inauguration, this indicator reached close to 500 points. In recent months, it has taken a steep downward trend and is now around 200 points.

In practice, when the country risk goes down, it means that the country has become more reliable for foreign investors. Between January and May alone, in the wake of this renewed confidence, the country attracted US$ 32.4 billion in foreign investments for the productive sector. This means more money with the potential to create more jobs and income in Brazil. The forecast is that the country will receive US$ 75 billion in inflows this year.

Companies are more valuable

Another important gauge, the São Paulo Stock Exchange (BM & FBovespa) changed direction after Temer came into office. At its worst time, in the first quarter of last year, the Ibovespa, the main index of the Brazilian market, had fallen to 38,000 points. From that point until last Tuesday (04), the stock market rose by almost 70%.

The sum of all companies listed on the Bovespa stock exchange saw strong valuation in the period between May 2016 and May 2017 (i.e. Temer's first year in office). Collectively, these companies saw market value gains of R$ 509.78 billion.