The sweeping victory of centrist and right-wing parties in municipal elections on Sunday will give Brazil’s new President Michel Temer at least a temporary boost as he pushes through austerity reforms, analysts said Monday.
The once-dominant leftist Workers’ Party was routed in the nationwide polls, confirming Brazil’s shift to the right in the wake of August’s impeachment of president Dilma Rousseff and her replacement with Temer.
A member of the center-right PMDB party, he has vowed far-reaching reforms to drag Brazil out of its worst recession in almost a century.
The first stage is a spending cap that would limit budget increases to the rate of inflation for the next 20 years, meaning freezes in health, education and other key areas.
But that requires a constitutional amendment, for which Temer needs a two-thirds majority in Congress.
Although he suffers rock-bottom approval ratings and is often confronted by protesters in public, Sunday’s results point to broad support for some austerity.
“This confirms (the shift to) less government intervention than under the Workers’ Party, giving space to other sectors,” said Ignacio Crespo, an analyst at Guide Investimentos.
“There will be a smaller, more streamlined state.”
The spending ceiling will face its first legislative test this week. The package is scheduled for a reading in committee on Tuesday and a committee vote Thursday.
