Cruzado Plan

The Cruzado Plan (Portuguese: Plano Cruzado) was a set of economic measures launched by the Brazilian government on February 28, 1986, based on Decree-Law No. 2883 of February 27, 1986, with José Sarney as president and Dilson Funaro as Minister of Finance. The plan was approved in the Chamber of Deputies with 344 votes in favor and 13 against, while in the Federal Senate only 1 of the 49 parliamentarians voted against.

The main goal of the plan was the price control. Food, fuel and services had their costs regulated by the administration. The measures contradicted the recommendation of the International Monetary Fund, which were accused by the government of being "speculators".

The Cruzado Plan reduced inflation from 12.49% in February 1986 to 1.40% in October of the same year. As a result, the Sarney government became extremely popular, the PMDB elected 53% of the federal deputies and the PFL 24% - providing the administration with a 77% majority in Brazil's federal elections in 1986. The plan was praised by newspaper and politicians, such as José Serra, Maria da Conceição Tavares, Plínio de Arruda and Aloízio Mercadante. Leonel Brizola and Roberto Campos, creator of the BNDES, were the project's biggest critics.

Due to price controls on products and services, supplies became scarcer. Exports fell, imports increased and foreign exchange reserves were depleted. Six days after the federal elections in Brazil in 1986, the government launched the Cruzado Plan II. In 2005, José Sarney admitted that the Cruzado Plan was a mistake.