Bolsonaro Signs Brazil’s 2022 Budget Into Law, Fueling Inflation Concerns

President Jair Bolsonaro kept funds to increase salaries for some public servants in this year’s budget, as growing concerns about government spending ahead of the October election drive investors to revise up their expectations for inflation.

Latin America’s largest economy is expected to end the year with a primary fiscal deficit of 79.3 billion reais ($14.55 billion), not taking into account interest payments, according to the 2022 budget Bolsonaro signed into law on Monday. The plan sets aside 1.7 billion reais to raise salaries, far from enough to contemplate all public servants. Bolsonaro had initially promised pay increases for federal police, but several other public workers, including central bank and customs officials, have threatened to go on strike if they don’t get the same treatment.