(Reuters) - Brazilian presidential candidate Marina Silva has little experience with economic policy, but her advisers promise a more orthodox, business-friendly approach than leftist President Dilma Rousseff has taken.
Eduardo Giannetti da Fonseca, an economist and top adviser to Silva since her 2010 presidential bid, has called her economic platform very similar to that of centrist candidate Aecio Neves, with whom she is running neck and neck for second place in a recent poll.
Giannetti says the main points of her economic platform will include:
Tightening the federal budget to generate a reliable surplus before interest payments would limit inflationary pressures and ease the burden on the central bank to keep interest rates high.
The central bank should have the autonomy to hew closer to its inflation target in order to win back credibility and reduce long-term inflation expectations.
Current policy includes an annual inflation target of 4.5 percent with a tolerance band of 2 percentage points up or down. Giannetti said the central bank under Rousseff has been “reckless” by allowing inflation to stay around 6.5 percent, the ceiling of the official target.
“The ceiling became the center of the target,” he said.
FREE-FLOATING EXCHANGE RATE
By allowing its currency to fluctuate freely against the U.S. dollar, Brazil can adapt more easily to shifts in the global economy, balancing foreign trade and domestic demand.
Under Rousseff, Brazil has effectively had a “dirty float” of the exchange rate, with the central bank intervening in the currency market to support other policy objectives such as helping exporters and controlling inflation.
Ending a policy that has curbed the rise of government-controlled prices. The aim would be to bring relief to the federal budget and state-run companies.
In an effort to control inflation, officials have been effectively subsidizing gasoline and electricity prices. The result has been heavy losses for state-controlled oil company Petrobras, a crisis for the ethanol industry and costly bailouts for power utilities.
For decades Silva, a former environment minister, has fought the deforestation fueled by Brazil’s booming agriculture and logging Industries, calling for a tougher forestry code and fighting paved highways through the Amazon jungle.
However, her new vice presidential running mate Beto Albuquerque has close ties with farming interests, reinforcing signs of reconciliation between Silva and agribusiness since she joined the Brazilian Socialist Party (PSB) in October.
Silva is set to announce her platform in the coming days.
Reporting by Brad Haynes; Editing by Walter Brandimarte and Kieran Murray