By Lise Alves, Senior Contributing Reporter
SÃO PAULO, BRAZIL – Rising inflation and plunging economic growth have been major concerns for Brazilians this election year. According to government data, Brazil’s GDP has gone from a growth of 7.5 percent per year in 2010 to forecasts of 0.7 percent in 2014, and Brazil’s Central Bank forecasts that this year inflation will reach 6.4 percent, just below the maximum target rate of 6.5 percent per year.
In this scenario of economic instability, top presidential candidates hurry to explain to voters the economic plans and programs they would implement if elected.
Taking a lot of criticism from opponents and economic analysts alike, President Dilma Rousseff, of the PT (Workers Party), says that controlling inflation has always been a priority in her government and that it will continue to be if she is elected to a second term.
She promises to seek strong, sustainable economic and social growth, increase investments rates and expand investments in infrastructure if elected to a second term.
Second-placed candidate Marina Silva, of the PSB (Socialist Party), pledges to set ‘plausible’ inflation targets which would not be obtained by controlling prices. She has also stated that she has plans if elected to generate a fiscal surplus so as to control inflation and maintain a floating foreign exchange rate without the intervention of the country’s Central Bank (CB).
The former environment minister also said her administration will create a Fiscal Responsibility Council, which will be totally independent from the government, to monitor the compliance to the fiscal targets and assess the quality of public spending.
Aecio Neves, of the PSDB (Social Democracy Party), has promised to maintain inflation at the center of the target and meet all the commitments of the primary surplus and floating foreign exchange. Neves, who is third in the polls, said that if elected he would bring ‘predictability’ to Brazil’s economy. This predictability, he says would lead to a decrease in inflation and an increase of economic growth.
Despite the many problems faced by Brazil’s economy, one fairly small issue has repeatedly made headlines in the past few weeks: what will be the level of independence of Brazil’s Central Bank (CB) in the upcoming administration.
While both Neves and Rousseff have stated that the CB would continue to enjoy the operational autonomy it currently has, Silva has repeatedly promised to introduce legislation that would make the institution totally free from government influence. Silva recently said in a campaign rally that the CB could not remain at the mercy of a specific political project.
The latest opinion poll by Datafolha, released on Tuesday, September 30th, shows President Rousseff leading the race with forty percent of the votes. Second-placed Marina Silva has 25 percent of the votes and Aecio Neves is in third with 20 percent voter intention. A poll released by Ibope on the same day shows Rousseff with 39 percent, Silva with 25 percent and Neves with 19 percent.
Close to ten percent of voters do not know yet who they will vote for or did not want to respond to the poll. If no one candidate is able to obtain fifty percent plus one of the votes there will be a second round of elections between the first two placed candidates on October 26th.