Lula and Bolsonaro Pledge Fiscal Consolidation Before Brazil Runoff

President Luiz Inacio Lula da Silva and Senator Flavio Bolsonaro are prioritizing politically palatable fiscal measures as Brazil's presidential runoff campaign enters its final stage. Both candidates are pledging fiscal consolidation to address a gross debt that has reached 82.9% of GDP, following a first round where Bolsonaro unexpectedly led.

Bolsonaro proposes improving the primary balance by 1.5% of GDP within 18 months to lower borrowing costs. His adviser, Daniella Marques, stated that social benefits would remain untouched, arguing that the government can work by "cutting its own excesses."

Lula advocates for a slower pace of adjustment designed to protect lower-income citizens. His running mate, Geraldo Alckmin, suggested that consolidation efforts should instead target high public-sector salaries and campaign funding. Despite their differing timelines, both campaigns have avoided proposing structural reforms to rigid budgets or mandatory spending.