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Significance
Given his low popularity, Bolsonaro adopted a series of measures to mitigate the effects of accelerating inflation, economic slowdown and increasing poverty. The objectives are clearly electoral. The measures, popularly known as the 'bag of goodies', create a series of 'fiscal bombs’ for 2023.
Impacts
Much of the recent sharp increase in public spending plans is motivated by next month’s general elections.
Factors that boosted budget revenues in 2022 are unlikely to be repeated next year, when significant fiscal deterioration is probable.
Continued high interest rates will have a lagged effect on the cost of public debt servicing.
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2022
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