Bolsonaro Signals More Social Spending Ahead of Brazil Runoff

(Bloomberg) -- President Jair Bolsonaro is turning to promises of more social spending in a bid to improve his standing amid low-income Brazilians ahead of a Oct. 30 runoff against Luiz Inacio Lula da Silva.

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Bolsonaro, who had a stronger performance than most pollsters anticipated in the first round of voting, announced his government will pay an extra 600 real ($116.58) stipend for women benefiting from his social program in 2023 if he is elected for another four-year term. That extra spending would cost public coffers at least 6 billion reais a year, according to estimates from the economic team.

His administration also front-loaded disbursements of gas vouchers and monthly cash payments, which are usually paid out at the end of the month, to early October. It included 500,000 families in Bolsonaro’s flagship Auxilio Brasil program, and added another 200,000 in the gas voucher program.

Bolsonaro received over 43% of the votes in the first round of election on Oct. 2, placing second to Lula, who got 48%. While both men have high rejection rates, Bolsonaro’s mostly comes from low-income voters, especially women, making female voters a focus of the incumbent’s campaign.

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Bolsonaro and Lula have already said the social program transfers will remain at 600 reais next year, up from the original 400 reais. Brazil’s 2023 budget doesn’t have the funds or fiscal space for that, and neither have explained how they’ll pay for the added cost.

Taking a Back Seat

The plan to pay women in Auxilio Brasil more money next year came from Bolsonaro’s campaign team, according to people with knowledge of the matter. Economy Minister Paulo Guedes was told about the plan, but has taken a back seat to Bolsonaro’s political advisers at this point, said one of the people, asking not to be named because the discussions are private.

“We know how to do it and we are going to do it,” Citizenship Minister Ronaldo Bento told journalists when asked about the extra cash handout on Tuesday. “People who are hungry and need social protection cannot wait.”

Guedes was also assigned with helping his boss in the election by being more vocal about economic achievements of the past few months, the people said. Bolsonaro’s campaign wants the minister to focus on the drop of unemployment, which is now below 9%, and tout the decline in fuel prices and inflation.

Consumer price increases stung Bolsonaro’s popularity early in the campaign, but have since lost steam. Inflation is expected to end the year at 5.74%, according to a weekly central bank survey.

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