Lula’s Team to Weigh a More Conservative Spending Plan for Brazil

Brazil President-elect Luiz Inacio Lula da Silva’s transition team will weigh a more conservative alternative to finance next year’s social outlays as investors eagerly await spending details, according to two people with knowledge of the matter.

The plan calls for removing about 130 billion reais ($24.4 billion) from the public spending cap next year, 45 billion reais less than the proposal that is under discussion in congress, said the people, who requested anonymity because the talks aren’t public. Such an exception would only occur in 2023, after which the administration would implement a new rule to replace the cap, demonstrating a commitment to fiscal responsibility, they said.