Brazil's stock market ended June with the biggest quarterly drop since the beginning of the Covid-19 pandemic. The fall accompanied the decline abroad, but was also exacerbated by the domestic political scenario, with President Jair Bolsonaro (PL) seeking to improve his chances of reelection through increased public spending.

At the end of this month, the market's eyes turned to the discussion in Congress about the Proposed Constitutional Amendment 1, dubbed PEC Kamikaze, which provides for the release of federal government spending and the creation of new social benefits.

This type of measure worries investors, as it increases indebtedness and poses threats to the future execution of the budget. It's what analysts often call fiscal risk.

At the end of the second quarter of 2022, the Ibovespa sank 17.88%. It is the worst result since the 36.86% dip at the end of the first quarter of 2020.

_{Translated by Kiratiana Freelon}