Vice President Geraldo Alckmin has promised business leaders a primary surplus of at least 0.5% of GDP in 2027, if President Luiz Inacio Lula da Silva wins re-election in Brazil's October vote. In household terms, it is like a family earning 5,000 reais a month starting to save 25 reais instead of spending it all. In Alckmin's view, the effort paves the way for lower interest rates and cheaper credit.
A promise at a business dinner
Alckmin spoke at a dinner with executives in Brasilia on Wednesday night (Sept. 9), according to Folha de S.Paulo. The meeting is an attempt to rebuild the pact that business sectors sealed with Lula in 2022, when the common goal was defeating Jair Bolsonaro. This time the main rival is Senator Flavio Bolsonaro, son of the former president.
At the dinner, the vice president called for cutting privileges enjoyed by members of the judiciary and of Congress as a way to curb waste of public money. According to accounts heard by Folha, he said Brazilians are angry about the high salaries and benefits in those branches. In his view, it must be made clear that Lula is the one who can fight them.
Understand: the primary surplus compares what the government collects with what it spends over a year, leaving out interest payments on the debt. Think of it as a family's balance before paying the card bills that carry interest. A positive result signals that the country lives within its budget, which tends to help pull interest rates down.
Interest rates at the center of the talk
After hearing complaints about interest rates, Alckmin compared the present with 2020. He said Jair Bolsonaro's government that year spent 10% of GDP more than it collected and paid not a cent of the debt. On the household yardstick, that is a family earning 5,000 reais a month overspending by 500 reais every month without paying a single bill.
Defending Lula's record, the vice president said the primary deficit has been zeroed this term. The target of a surplus of at least 0.5% of GDP for next year was also reported by Brasil 247. Alckmin argued for pushing the fiscal adjustment further, on the reasoning that sound public accounts push rates down.