Brazil's Flavio Bolsonaro vows to keep pension increases above inflation rate

Brazilian presidential candidate Flavio Bolsonaro said ​on Thursday that, if elected in a ​runoff vote later this month, ‌he would ​continue raising pensions above the rate of inflation. The right-wing senator, who unexpectedly finished first in Sunday's first-round vote, made the ‌remarks a day after Folha de S.Paulo reported that his campaign's fiscal plan to strengthen public finances included capping growth in social-benefit spending at the inflation rate.

"I won't balance the books on the ‌backs of those who need it most," Bolsonaro told reporters in Brasilia. Folha, a Brazilian ‌newspaper, reported late on Wednesday that Bolsonaro's economic advisers are studying measures to curb mandatory federal spending and generate 250 billion reais ($49.8 billion) in savings.

The fiscal adjustment, equivalent to roughly 2% of the country's GDP, would also ⁠include scrapping ​constitutional spending floors that ⁠tie healthcare and education spending to federal revenue growth, according to the report. Instead, expenditures in both areas would ⁠be indexed only to inflation. The proposals have been presented by members of Bolsonaro's campaign team in meetings ​with business executives and financial market players throughout this year, according to the newspaper.

Without ⁠directly referring to Folha's report, Bolsonaro's campaign economic coordinator, Adolfo Sachsida, said in a post on X on Thursday ⁠that ​any fiscal adjustment would focus on "reducing government excesses." A Bolsonaro government would maintain all social programs and cut taxes, he said, rejecting the possibility of privatizing state-run firms such ⁠as Petrobras and Banco do Brasil .

Leftist President Luiz Inacio Lula da Silva, who is Bolsonaro's opponent ⁠in the October ⁠25 runoff, is warning that a government run by the challenger would put social gains at risk, including above-inflation wage and pension increases. ($1 = ‌5.0219 reais)