The five best-polling candidates in Brazil's October presidential election identify the country's high interest rate as one of the main obstacles to economic growth in their government programs and defend a fiscal adjustment as the way to bring it down. A survey by G1 of the plans registered with the Superior Electoral Court (TSE) shows, however, that the proposals lay out the general lines of that adjustment while giving few details on how to carry it out. The first round is scheduled for October 4.
The campaigns' diagnosis is similar to that of private-sector analysts: Brazil's public debt is at its highest level since the pandemic, real interest rates are the highest in the world and the country has not posted recurring, sustained primary surpluses since 2013. According to G1, the programs also include generic references to reforming mandatory spending, measures that are traditionally unpopular and politically complex to implement. The survey examined the programs of Luiz Inácio Lula da Silva (PT), Flávio Bolsonaro (PL), Ronaldo Caiado (PSD), Renan Santos (Missão) and Romeu Zema (Novo).
What the plans say
In the program of Lula, who is seeking a fourth term, his coalition says the economy grew an average of 3% a year in recent years and argues that "the interest rate is today what inflation was in Brazil's past: it concentrates income and disorganizes our economy". The text says the government made an "enormous fiscal effort" of about 2% of GDP, or R$ 240 billion, between 2023 and 2026, and signals a gradual adjustment of similar intensity in a new term. The plan keeps the arcabouço fiscal, the 2023 fiscal framework that bars spending from growing faster than revenue and caps real spending growth at 2.5% a year. Analysts criticize the rule's exceptions, which have pushed spending higher, and say the minimum wage appreciation policy kept in the program makes the adjustment harder because it is linked to pension spending. The program also promises to fight the abusive hiring of workers as companies and to press the Senate to end the six-days-on, one-day-off work scale known as 6x1, cutting the workweek to 40 hours without pay reductions, as approved in the lower house.
The coalition of Flávio Bolsonaro promises a more intense adjustment, described in the program as a "big scissor cut", with a "deep cut from all sides that slims down the machine". The goal is, "with the accounts in order", to achieve "lower interest rates".
"We will present an overhaul of the current fiscal rules, with clear rules focused on stabilizing and reducing the public debt as the Constitution determines. We will build lasting fiscal balance, delivering primary surpluses and limiting subsidized credit with Treasury funds", says the excerpt of the PL program, which also provides for a rule controlling discretionary spending by the three branches of government.
The plan of the PL candidate also includes cutting taxes on energy and fuels "so families have money left at the end of the month". G1 points out that lower revenue makes the fiscal adjustment harder.
Caiado said in an interview with Globo on Tuesday (25) that, if elected, he will send Congress a constitutional amendment on his first day in office capping the growth of federal spending at inflation plus 50% of GDP growth. The former governor of Goiás called the current fiscal framework a "big sham" and defended an administrative reform to cut spending and "extortionate salaries" in the Executive, the Legislature, the Judiciary and the federal audit court. Asked about the calculations behind the target, he asked for "calm": "A patient was run over by a bus. Which points will you prioritize? Well, I have not even examined the patient."
Folha de S.Paulo has also begun examining the economic programs of the same five candidates, in a series of interviews with campaign spokespeople that include Finance Minister Dario Durigan, from Lula's campaign, and former Caixa president Daniella Marques, an adviser to Flávio Bolsonaro. "The presidential candidates present quite different economic models for the country. It is necessary to scrutinize these promises with real-world data, so voters can tell what is mere propaganda from what is actually part of a feasible political project", said Mariana Carneiro, the newspaper's Brasília bureau managing editor.