Lula Weighs Alckmin as Finance Minister to Boost Fiscal Credibility

Brazilian President Luiz Inacio Lula da Silva is considering appointing Vice President Geraldo Alckmin as finance minister if he wins re-election, a move aimed at strengthening his fiscal credentials ahead of Brazil’s presidential runoff.

Two people familiar with the discussions said Alckmin could remain vice president while taking control of the Finance Ministry next year. The proposal remains under consideration, and Brazil’s presidency did not respond to a request for comment.

Alckmin, a veteran centrist and former Sao Paulo governor, challenged Lula for the presidency in 2006 before becoming his running mate years later. He also headed the Development, Industry and Trade Ministry until earlier this year and became an important government contact with Washington following sweeping U.S. tariffs on Brazilian goods.

Known for close ties to Brazil’s business community, Alckmin is widely viewed as a moderating figure within Lula’s government. Lula considered naming him finance minister after the 2022 election but ultimately selected Workers’ Party member Fernando Haddad.

The potential reshuffle comes after Lula finished second in Sunday’s first-round presidential election behind Senator Flavio Bolsonaro, the eldest son of former President Jair Bolsonaro and an ally of U.S. President Donald Trump. The result surprised pollsters, many of whom had expected Lula to narrowly lead.

Bolsonaro’s stronger-than-expected performance, combined with gains by right-wing candidates in Congress, triggered a Brazilian market rally Monday. Investors expect a Bolsonaro government could pursue faster fiscal consolidation with stronger congressional backing.

Fiscal concerns have become a major vulnerability for Lula. Brazil’s gross public debt has climbed more than 10 percentage points since he took office, reaching 82.9% of GDP, despite stronger economic growth, historically moderate inflation, record-low unemployment and rising real wages.

Lula highlighted Alckmin’s fiscal credentials following the election, citing his record governing Sao Paulo. Elevating Alckmin could help Lula appeal to centrist and business-oriented voters worried about government spending but reluctant to support Bolsonaro.

With the runoff approaching, putting Alckmin at the center of economic policy could become a key part of Lula’s strategy to rebuild market confidence and broaden his electoral coalition.