Lula administration keeps the electoral toolbox open

Yesterday's newsletter unpacked the power of incumbency in Brazil: controlling the purse strings gives a re-election candidate ample opportunities to manufacture feel-good economics on demand. As his predecessors did, President Luiz Inácio Lula da Silva has been raiding that toolbox with gusto, with a debt-renegotiation program, a new anti-crime plan, as well as tax cuts that conveniently undo hikes his own administration proposed. 

Now comes the latest move: a push to tame fuel prices, the latest of a series of piecemeal measures to offset the effects of the war in Iran on oil prices.

A provisional decree issued Wednesday creates a subsidy of BRL 0.89 per liter of gasoline and BRL 0.35 for diesel, achieved by slashing federal social security levies.