Luiz Inacio Lula da Silva, Brazil’s socialist president, tried to reassure financial markets on Thursday, saying they should not worry about his government’s economic policies and that measures would be introduced in the next 100 days, Reuters reported.

He made the comments in the context of his statements regarding the storming of the Brazilian Congress by supporters of former President Jair Bolsonaro last Sunday.

“What happened was a huge warning, we won the election, but Bolsonaro’s fanatical supporters are very dangerous. We will have to be even tougher and more careful in the future,” he said.

At the same time, he assured that the Minister of Defense Jose Musio will keep his position, even if he said about him that he was wrong in the management of events.

At the time, Brazil’s 77-year-old president said financial markets, which had already been rattled by some of his government’s actions in his first days in office, should not be alarmed by the Workers’ Party’s return to power.

“I’ve always watched the budget surplus,” he said, who previously served as Brazil’s president from 2003 to 2010. Fiscal surplus or deficit refers to that component of the state budget that shows the difference between government revenues and expenditures, excluding payments and interest. paid for public debts.

But official figures show Brazil ran a budget deficit in every year of Lula’s rule, although it was much smaller than under former President Jair Bolsonaro.

Financial markets were spooked by Lula’s re-election

His comments on Thursday came as criticism of the economic policies he announced intensified after Brazil’s markets crashed just two days after he took office on January 1.

One of the main targets of the attacks is Finance Minister Fernando Haddad, a Lula loyalist who tried unsuccessfully to win the 2018 presidential election for the Workers’ Party.

O Estado de S. Paulo, a newspaper in his hometown, called Haddad a “decoration minister” after Lula ordered the extension of the fuel tax exemption, which will have wide-ranging budgetary implications.

Haddad, a former mayor of Sao Paulo, took office promising to rebalance public finances and introduce a sound fiscal system after Congress in Brasilia passed a massive social spending package backed by Lula.

Lula da Silva said eradicating poverty and hunger would be the “landmarks” of his government, raising fears of further out-of-control public spending and a lack of fiscal discipline.

Financial analysts accuse the Brazilian government of “deafness”

Markets reacted poorly to his first days in office, with O. Estado de São Paulo noting that “Haddad knew from day one that he was going to be a figurehead, sort of a courier for President Lula.”

The conservative daily, which has not been shy about criticizing former right-wing president Jair Bolsonaro, added that Haddad had been “discredited from day one” and that he should learn to say no to Lula.

Analysts at Citigroup said on Tuesday that both Lula and Haddad “overall left the impression of a government that is deaf, at least to what the financial markets want to hear.”

Strategists at Canadian investment bank BMO Capital Markets told clients that statements made by two Brazilian officials suggested that a situation could arise where “inflation will pick up and the key interest rate cut through the window.”

Carlos Lupi, the social assistance minister, baffled analysts after he said the social security system had no deficit, even though figures released by the Brazilian Treasury showed it had accumulated a deficit of 267.9 billion between January and November last year. reals, about 49 billion dollars.

He later announced that the new government would have to review the pension reform approved by the Bolsonaro administration, which was welcomed by investors.

Luis Marinho, Brazil’s new labor minister, in turn said the new administration would focus on regulating labor relations through mobile phone apps and digital platforms.

Analysts at Guide Investimentos noted that their statements indicate that “the government remains on track to undo the liberal reforms adopted by the last two presidents.”

Adding to all this is the fact that Lula ordered the government to reverse the privatization process of some large state-owned companies, including the oil giant Petrobras, started under Bolsonaro.