Brazilian candidates debate state finances in Minas Gerais and São Paulo

During presidential and gubernatorial election cycles, candidates are addressing the fiscal health of major Brazilian states.

Presidential candidate Romeu Zema (Novo) attributed the debt of Minas Gerais to previous administrations and high interest rates imposed by the federal government. Zema stated that the debt, which originated in the 1990s, has grown due to what he described as “juros de agiota” (usury-like interest) from the federal government. He noted that while the nominal debt value has increased, the debt-to-revenue ratio improved from 190% to 160%, suggesting an enhanced capacity to pay.

In the race for the São Paulo governorship, Fernando Haddad (PT) criticized the current administration's financial management under Tarcísio de Freitas. Haddad claimed the state has lost investment capacity and moved from a surplus to a current deficit. He cited data showing a decrease in accumulated investments and a significant drop in the state Treasury's free cash. Haddad pledged to conduct a “pente fino” (thorough review) of state contracts, including outsourcing and concessions, to reduce expenses and create budgetary space for investments.