Brazil Vows to Keep Fiscal Framework and Spending Restraint if Lula Wins Again

Brazil's Finance Minister, Dario Durigan, has stated that the current administration will maintain its fiscal framework through spending controls and revenue recovery if it secures another term in the October election.

In an interview with local radio CBN, Durigan highlighted the government's past fiscal effort, which amounted to 2% of GDP, and expressed readiness to undertake a similar effort again. He noted that discussions with Congress have already led to adjustments aimed at cutting mandatory spending by around 10 billion reais ($1.9 billion) in 2027.

"We must continue this good work of institutional dialogue—cutting spending and broadening the revenue base in a way that is fair to the population—so that we can achieve a positive result as early as next year," Durigan said.

The minister also argued that addressing the issue of interest rates is crucial for tackling inequality, adding that lower borrowing costs could help reverse the trajectory of public debt. Brazil's central bank recently cut its benchmark interest rate by 25 basis points for a fourth consecutive meeting, bringing it to 14.00%, while leaving future moves open.

Durigan mentioned that meetings with economists from various backgrounds have been valuable in understanding their concerns ahead of the election.