Brazil’s Neves Gets Party Endorsement, to Challenge Rousseff

Brazilian Presidential Candidate Aecio Neves
Aecio Neves, Brazilian presidential hopeful, said his government would focus on reaching the mid-point of the 2.5 percent to 6.5 percent target range rather than trying to avoid breaching the ceiling. Photographer: Evaristo Sa/AFP via Getty Images

Senator Aecio Neves received his party’s nomination to run for Brazil’s top job in October elections, saying he would seek efficiency in public services as economic growth falters.

“We have the challenge and the responsibility of changing and improving this country,” Neves said in a speech at the national convention of the Brazilian Social Democracy Party, or PSDB, in Sao Paulo today. “We are hostages today to the worst economic equation in emerging markets, with minimal growth and worsening inflation.”

Neves said in an interview with Globo News aired yesterday evening that his administration gradually would reign in public spending as part of a policy to slow Brazil’s inflation to its target within three years.

“An adjustment would be made, but not overnight,” Neves, 54, said in the interview when asked about his fiscal strategy. “We would have a much more austere policy than what’s currently taking place.”

Senator Neves said his administration would reduce the number of ministries and make fiscal accounts more transparent, increasing efficiency while boosting investors’ confidence in Brazil. He said he would simplify the tax system before finding space to alleviate the burden for all taxpayers.

October Vote

President Dilma Rousseff’s lead over Neves has narrowed in opinion polls ahead of the Oct. 5 vote as the economy slows and inflation approaches the upper limit of the target range. Equity markets have rallied on Rousseff’s sliding popularity on speculation Neves would intervene less in the economy if he wins the election.

“Neves is on the rise,” David Fleischer, a professor of political science at the University of Brasilia, said by telephone before Neves’s interview aired. “He’s on the right track.”

Rousseff’s support fell to 34 percent this month from 37 percent in May, according to a June 3-5 Datafolha poll. Neves, also a former governor of Minas Gerais, the country’s second-most populous state, saw his backing slip by 1 percentage point to 19 percent.

In a runoff election on Oct. 26, Rousseff’s lead over Neves would narrow to 8 percentage points from 11 percentage points in the previous survey. The poll has a margin of error of plus or minus 2 percentage points.

Support Declining

The Ibovespa Sao Paulo Stock Exchange index surged 3 percent June 6, the day the poll was published. It was the biggest increase since March 27 when a separate poll showed Rousseff’s support declining.

“I have absolute conviction that with new public policies and the reorganization of the Brazilian state, the results will give investors the confidence lost during this government,” Neves said in the hour-long interview.

Neves said his government would focus on reaching the mid-point of the 2.5 percent to 6.5 percent target range rather than trying to avoid breaching the ceiling. Consumer prices rose 6.37 percent in May from last year, when inflation twice surpassed 6.5 percent.

The senator said in an interview televised on TV Cultura June 2 that inflation would be able to reach target within two years.

Also during the June 2 interview, Neves said he would continue boosting the minimum wage by at least the rate of inflation and guarantee funding for the government’s Bolsa Familia program, which transfers cash to the poor.

The grandson of former president-elect Tancredo Neves, the senator receives 26 percent of his support among voters earning no more than 1,448 reais ($651) a month, or two minimum salaries, according to the Datafolha poll. Rousseff gets 51 percent of her backing from respondents in the same category. Tancredo Neves died before assuming office.

Rousseff’s predecessor and political mentor, Luiz Inacio Lula da Silva, in 2003 took over the country’s reins from Fernando Henrique Cardoso, a two-term president who co-founded the PSDB.

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