Three economy ministry officials, who requested anonymity to discuss internal deliberations, said the ministry had received no orders to consider a change to the constitutional spending cap and that they would resist easing. tax rules.
Bolsonaro is trailing in the opinion polls behind leftist former president Luiz Inacio Lula da Silva, who has repeatedly called for the spending cap to be removed. Analysts warn the right-wing incumbent may turn to increasingly populist economic proposals to play catch-up in this highly polarized race.
Bolsonaro came forward in 2018 promising orthodox economic policy and big privatizations, but he has failed to deliver on most of those plans and has increasingly relied on energy subsidies and social spending to prop up its popularity.
“Last year we had about 300 billion reais ($61.3 billion) in excess revenue, but you can’t spend a penny of that on infrastructure because of the spending cap,” Bolsonaro said during the meeting. from a radio interview.
“A lot of people are saying this is something that needs to be changed. We leave that for the future, we will discuss this issue after the elections,” he added.
The spending cap was approved by the Brazilian Congress in 2016, amending the constitution to limit the growth of the federal budget to the rate of inflation.
The rule is seen as the main anchor of fiscal policy, although the Bolsonaro government has created exceptions to make room for more public spending this year.
The economy minister also proposed new ways to finance public spending, including a proposal last month to create a fund from the sale of public assets to pay for poverty reduction programs and public investments. .
($1 = 4.8967 reais) (Reporting by Ricardo Brito; Writing by Gabriel Araujo and Marcela Ayres; Editing by Brad Haynes, Paul Simao and Rosalba O’Brien)