BRASILIA, Nov 4 (Reuters) – Brazil’s reelected President Luiz Inacio Lula da Silva is expected to deliver a televised address on Sunday to recommit to budget discipline but without providing policy details, two sources with direct knowledge of the matter said on Wednesday.
Speaking on condition of anonymity, one source said the speech would stop short of announcing specific measures and would instead set out Lula’s broader economic and other priorities for his new term which starts in January.
Since the leftist incumbent’s surprise reelection on October 25, Brazilian assets have come under pressure with the currency weakening, stocks falling and market interest rates surging. Markets were more stable on Wednesday as Democratic gains in U.S. midterm elections boosted global risk appetite.
During the campaign for the Brazilian presidency, Lula’s advisers said he would commit to delivering the increasingly ambitious primary surplus targets that were laid out in budget guidelines submitted to Congress earlier this year.
The plan envisages an effective primary surplus of 1.3% of gross domestic product by 2030, compared with a projected deficit of 0.4% of gross domestic product this year.
However, few details have been provided on how such a repair to the public finances would be achieved amid rapidly rising mandatory public spending and a raft of costly election promises made by Lula.
Uncertainty over Lula’s policy team, including his choice for finance minister, has also unsettled investors.
(Reporting by Marcela AyresEditing by William Schomberg)
Comments