MercoPress. South Atlantic News Agency

Markets disappointed with Bolsonaro's watered down pensions reform

Bolsonaro told reporters that the minimum retirement age would be 62 for men and 57 for women, effective five years after legislation is passed

Brazil President Jair Bolsonaro on Friday called for minimum retirement ages significantly lower than those proposed by his predecessor, sparking concerns among investors that he will back watered-down pension reform legislation.

The newly inaugurated leader also said he is concerned that the latest proposal for the sale of 80% of Embraer's commercial aviation business to Boeing could ultimately lead to the U.S. plane-maker owning all of the new venture. It was the strongest expression of concern so far by his government over the tie-up.

On pension reform, Bolsonaro told reporters at an Air Force event that the minimum retirement age would be 62 for men and 57 for women, effective five years after any legislation is passed.
That is lower than the minimums of 65 years of age for men and 62 for women that were proposed by ex-president Michel Temer.

A reform of Brazil's bloated pension system will be among Bolsonaro's biggest challenges, since he has yet to build a base in Congress. It is key to erasing the country's 130 billion reais (US$34.76 billion) public deficit for 2019.

Investors on Friday sent interest rates higher on futures markets, showing disappointment about the lower-than-expected minimum age. The head of one major foreign bank's treasury desk saying that “it was not expected by the market and its unambitious, to say the least.”