By Jeffrey T. Lewis and Luciana Magalhaes
SÃO PAULO--President-Elect Luiz Inácio Lula da Silva named former São Paulo Mayor Fernando Haddad as finance minister in his incoming government, raising concerns in financial markets about the new Brazilian administration's plans to boost spending on social programs just as the country's debt level is poised to rise.
Mr. Haddad, who lost his 2018 presidential campaign to departing President Jair Bolsonaro, is a stalwart of Mr. da Silva's left-wing Workers Party. Mr. Haddad served as education minister for almost seven years under Mr. da Silva and his successor, Dilma Rousseff, until he won election as mayor of São Paulo in 2012.
Mr. da Silva also named José Mucio as defense minister, Rui Costa as chief of staff, Mauro Vieira as foreign minister and Flavio Dino as justice minister in his incoming administration.
During his campaign this year, Mr. da Silva announced a series of expensive proposals that threaten to bust the country's budget and balloon the national debt. Instead of Mr. Haddad, markets had been hoping for a more conservative finance minister who would work to maintain fiscal discipline instead of pouring cash into the economy.
Flavio Serrano, chief economist of Greenbay Investimentos, said Brazil can expect greater public spending with Mr. Haddad as finance minister. Picks for other top jobs within the ministry will become more important and investors will want to see "more conservative, technical names on the rest of the economic team," Mr. Serrano said.
Mr. da Silva, who will take office on Jan. 1, has worried investors after talking about raising the minimum wage, maintaining a current increase in welfare payments to low-income families, and enlisting state-controlled companies such as Petroleo Brasileiro SA and Banco do Brasil SA as instruments to spur financial growth.
Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com and Luciana Magalhaes at luciana.magalhaes@wsj.com
(END) Dow Jones Newswires
12-09-22 0943ET
