Brazilian assets tumbled over the past week as President Jair Bolsonaro’s administration faced nationwide protests, setbacks in the approval of key decrees and new strains in its relationship with Congress. Yet the prospects for pension reform are finally looking up.

Political consultancy Eurasia raised the odds of approval of the government’s flagship economic proposal to 80%, up from 70%, citing lawmakers’ waning resistance to a measure deemed vital to Brazil’s finances. Bank of America Merrill Lynch upgraded the nation’s sovereign bonds to overweight, saying it’s more confident the government can deliver a reform that would be deemed positive by investors.

“Support in Congress appears to be increasing amid more willingness by the government to engage in political negotiations,” BofA analysts Jane Brauer and Lucas Martin wrote in a note last week. They added that Brazil’s low short-term growth may push lawmakers to prioritize pension reform.

It’s a similar argument to the one made by Eurasia, which is betting that lawmakers are now more committed to the pension overhaul. Economy Minister Paulo Guedes has issued dire warnings about Brazil’s outlook if the reform doesn’t pass, and even engaged in shouting matches with lawmakers on the subject. Over the past few days, local media has reported lawmakers’ plan to present an alternative pension reform text, as the government struggles to make the case for its own proposal.

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