January 2019 Brazil Risk: Moderate Rating / by Mark Langevin

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The January 2019 Brazil Risk score Is 7 And Represents Moderate Country Risk.

  • Misery Index/Improved Performance

  • Formal Employment Index/Improved Performance

  • Economic Activity Index/Stable Performance

  • Homicide Rate/Poor Performance

  • Presidential Approval/Improved Performance

The January 2019 Brazil Risk score indicates improvement or stable performance on the key economic indicators as well as improved performance on presidential approval given the election of Jair Bolsonaro in last October’s second round presidential election and the subsequent high level approval of his transition in November and December of 2018 (up to 75% of respondents approved of the transition as measured by the IBOPE/CNI December 2018 poll). President Bolsonaro’s honeymoon with voters may not last if the economy, especially unemployment, continues to lag behind expectations and crime continues to shape citizens’ evaluations of their government leaders. The homicide rate continues to climb in the months surrounding the election and transition to a new federal executive. This singular indicator is troublesome and may persuade the Bolsonaro administration to take active, legally dubious measures to mitigate violent crime. The recent outbreak of violence in the state of Ceará underscores the policy challenge and the importance of this variable in shaping political development and ultimately Brazil’s country risk in the coming months. Taken together, these indicators suggest a moderate level of country risk in January 2019.


Each of the five monthly indicators is scored on a discrete scale: 0 for poor performance, 1 for stable performance, and 2 for improved performance. The scores are totaled for a measure on a scale of 0 to 10 with the former representing the absence of economic and political stability (higher country risk) and the latter representing economic expansion and stability (lower country risk).

The presidential approval is scored as 0 for approval between 0 and 40%, 1 for 41 to 60%, and 2 for approval exceeding 61%. For example, in November of 2018 then president Michel Temer’s approval (excellent or good) was 4% and therefore scored 0.

Risk Scale

Low - 8-10

Moderate - 5-7

High - 3-4

Very High - 0-2