Five economic challenges facing Brazil's re-elected President Lula
Published - October 26, 2026 07:24 am IST - BRASILIA Brazil's economy has beaten expectations in recent years, but mounting debt and entrenched structural problems could complicate leftist President Luiz Inacio Lula da Silva's fourth term, which begins in January. Here are the five main economic challenges he faces: Brazil’s public debt has surged more than 10 percentage points during Mr. Lula’s current term to over 82% of GDP, driving up borrowing costs. The root cause is years of rising mandatory spending, leaving under 8% of the federal budget adjustable. Mr. Lula has sent mixed fiscal signals, at times dismissing debt worries as “nonsense” while arguing that strong economic growth would fix the problem. His team has pledged to keep the government's current budget rules, which cap spending growth and set primary balance targets — revenues minus expenditures, excluding interest…
