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.
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 payments on public debt — and hinted at tightening them. The government has also discussed with the central bank ways to rein in heavy use of easy but expensive credit, such as credit cards and unsecured consumer loans, though it has not detailed any proposals. Mr. Lula will likely struggle to push his economic agenda through Congress after voters elected the most conservative legislature since Brazil’s return to democracy in the 1980s. Bolsonaro’s Liberal Party and its allies are set to control both chambers. During his current term, Mr. Lula has struggled to name nominees and win Senate approval for them at key institutions, including the Supreme Court, central bank, securities regulator, and antitrust watchdog, and that is likely to be even more difficult ahead with the rightward shift of Congress. That delay could push back revenue from the tax and has fuelled criticism of the government’s handling of tax policy.
2026) runoff, Mr Although he defeated right-wing Senator Flavio Bolsonaro in Sunday’s (October 25.
