Flávio Bolsonaro proposes new spending cap and fiscal cuts

Flávio Bolsonaro, a presidential candidate for the PL party, has outlined several economic proposals aimed at fiscal adjustment and rapprochement with the financial sector. During private meetings with banking executives and investors in São Paulo, Bolsonaro proposed replacing the current fiscal framework with a new spending cap or a mechanism to limit public expenditures. He suggested a reduction in spending equivalent to 1.5% of GDP and a reduction in the number of ministries and commissioned positions.

In a televised interview, Bolsonaro addressed concerns regarding social spending, stating he would not cut the minimum wage or pension benefits, but rather seek savings through combating corruption and reducing bureaucracy. He attributed Brazil's high interest rates and public debt to the economic policies of President Lula's administration.

These moves toward the financial elite have drawn reactions from President Lula, who signaled a more formal and distant relationship with the bankers involved in the meetings. The discussions included high-level executives from major institutions such as Itaú Unibanco, Bradesco, and Santander Brasil.