Key facts
- Flavio Bolsonaro vowed to continue raising pensions above inflation if elected.
- Reports indicated Bolsonaro's campaign considered capping social benefit spending growth at inflation.
Flavio Bolsonaro, a leading presidential candidate in Brazil, stated his intention to continue increasing pensions above the inflation rate if elected. This contrasts with reports of his campaign considering measures to cap social benefit spending growth at inflation levels to achieve fiscal savings.
The statements highlight a potential divergence in fiscal policy between Flavio Bolsonaro's campaign promises and reported internal plans, which could impact Brazil's sovereign debt and investor confidence.
SAO PAULO, Oct 8 (Reuters) - Brazilian presidential candidate Flavio Bolsonaro said on Thursday that, if elected in a runoff vote later this month, he would continue raising pensions above the rate of inflation. The right-wing senator, who unexpectedly finished first in Sunday's first-round vote, made the remarks a day after Folha de S.Paulo reported that his campaign's fiscal plan to strengthen public finances included capping growth in social-benefit spending at the inflation rate.
'I won't balance the books on the backs of those who need it most,' Bolsonaro told reporters in Brasilia. Folha, a Brazilian newspaper, reported late on Wednesday that Bolsonaro's economic advisers are studying measures to curb mandatory federal spending and generate 250 billion reais ($49.8 billion) in savings.
The fiscal adjustment, equivalent to roughly 2% of the country's GDP, would also include scrapping constitutional spending floors that tie healthcare and education spending to federal revenue growth, according to the report. Instead, expenditures in both areas would be indexed only to inflation.
The proposals have been presented by members of Bolsonaro's campaign team in meetings with business executives and financial market players throughout this year, according to the newspaper. Without directly referring to Folha's report, Bolsonaro's campaign economic coordinator, Adolfo Sachsida, said in a post on X on Thursday that any fiscal adjustment would focus on 'reducing government excesses.' A Bolsonaro government would maintain all social programs and cut taxes, he said, rejecting the possibility of privatizing state-run firms such as Petrobras and Banco do Brasil.
Leftist President Luiz Inacio Lula da Silva, who is Bolsonaro's opponent in the October 25 runoff, is warning that a government run by the challenger would put social gains at risk, including above-inflation wage and pension increases.
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