Jair Bolsonaro, Brazil’s President-elect, said the nation’s congress is unlikely to pass a pension reform bill this year.
Bolsonaro’s Monday announcement weakened the real against the dollar in futures markets, hitting investors who bought assets after his October victory. The election win sparked contrarian hopes that he’d quickly move to resolve fiscal overhauls, such as making cuts to Brazil’s social security system to begin reversing its debt and economic problems, and boost its investment-grade rating.
Despite last week’s words of encouragement for a pension reform passing in 2018, Bolsonaro changed his mind after meeting with Paulo Guedes, his chief economic advisor, who had also previously called for a quick overhaul.
Bolsonaro said that legislation would have to consider the social impact of the changes in addition to crunching the numbers.
Older versions of a pension reform bill under Michel Temer, Brazil’s exiting leader, were congressionally rejected, heavily protested, and frequently delayed until Temer eventually decided he would leave the issue to the next commander in chief.
Bolsonaro will take office on January 1.