Economic Reform: Spending Cuts Divide Government and Financial Markets

Estadão reported that markets reacted poorly to the lack of structural spending cuts, driving the US dollar above R$ 5.80. Gazeta do Povo highlighted a National Treasury study projecting gross public debt to reach 80% of GDP, while InfoMoney interviewed economists who advocate unlinking welfare benefits from the minimum wage to rein in the fiscal deficit.

Carta Capital argued that fiscal consolidation disproportionately impacts the poor while safeguarding tax breaks for major corporations. Brasil de Fato cited Unicamp economists who advocate for taxing the ultra-wealthy, and Folha noted that the administration is banking on economic growth and increased tax revenues rather than social welfare cuts.