Thursday, 13 Jun 2024

Brazil's Bolsonaro seeks movement on pension reform this year

BRASILIA (Reuters) – Brazil’s right-wing President-elect Jair Bolsonaro said on Tuesday that Congress must make some progress this year on a pension reform proposed by the outgoing government before he takes office Jan. 1.

Bolsonaro’s team of orthodox economists, led by future minister Paulo Guedes, wants to move quickly to reduce the budget deficit to restore investor confidence, spur economic growth and create jobs.

But his political advisers, led by future chief of staff Onyx Lorenzoni, want to wait until a more supportive Congress takes office next year to avoid the risk of defeat.

“We cannot end the year without taking a step forward on pension reform,” Bolsonaro told reporters on his first visit to the capital Brasilia since he was elected nine days ago.

A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015.

Guedes, who will head a “super ministry” overseeing the portfolios of the current finance, budget and industry ministries, said if pension reform is not approved this year it will have to be fast-tracked next year.

If the current limited plan passes Congress this year, the next government could focus on other reforms, Guedes told reporters.

“It would clear the horizon and we could start to work on structural reforms with more calm,” he said.

Brazil’s gross domestic product could grow by 3.5 percent in 2019 if Congress approves pension reform this year, he said.

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