Brazil's Flavio Bolsonaro pledges fiscal adjustment

Sao Paulo Brazilian Senator Flavio Bolsonaro has pledged to reduce the country’s rising public debt without cutting social spending commitments if elected president, rejecting media reports that his campaign was considering measures to curb minimum wage increases and reduce benefits. The right-wing lawmaker, the eldest son of former Brazilian President Jair Bolsonaro, made the remarks during an interview with TV Globo’s Jornal Nacional, the country’s most-watched television newscast. He said his administration would pursue a fiscal adjustment worth 200 billion reais ($39.49 billion) in the federal budget while protecting politically sensitive social programmes. Flavio Bolsonaro is set to face incumbent left-wing President Luiz Inacio Lula da Silva in a runoff election scheduled for October 25. Recent polling has shown Bolsonaro leading Lula, although the contest remains a closely watched political battle with significant implications for Brazil’s economic direction. During the interview, Bolsonaro dismissed reports suggesting that his campaign was considering freezing real minimum wage increases, eliminating automatic adjustments to social benefits or reducing mandatory social expenditures. "There has been a lot of fake news circulating, and this is an important moment to set the record straight," the senator said. Instead of cutting social spending, Bolsonaro said the proposed fiscal adjustment would focus on reducing the number of government ministries, addressing mismanagement at state-controlled companies and generating revenue by monetising federal real estate assets. The proposals come amid growing concerns over Brazil’s public finances. The country’s gross public debt has increased by more than 10 percentage points during Lula’s current term, reaching 82.9% of gross domestic product. The rising debt burden has placed fiscal policy at the centre of the presidential campaign, with candidates facing pressure to outline credible plans for managing government finances. Long-term interest rates in Brazil have declined since Bolsonaro’s victory in the first round of the presidential election, reflecting developments in financial markets as investors assess the political outlook and potential economic policies.