Brazilian financial leaders call for consensus on fiscal adjustment

Financial leaders in Brazil are emphasizing the urgent need for fiscal adjustment to manage rising public debt and high interest rates. Ricardo Lacerda, CEO of BR Partners, stated that fiscal correction must be a consensus built between the population, Congress, and businesses, rather than a concern exclusive to the financial sector.

With public debt approaching 83% of GDP as of August, there are concerns that it could exceed 90% by 2028. This trajectory threatens to keep interest rates high and risks ‘fiscal dominance,’ a scenario where monetary policy loses effectiveness, potentially leading to economic collapse.

Industry executives suggest that regardless of whether Lula or Flávio Bolsonaro wins the 2026 election, the next administration will be forced to implement unpopular measures, such as pension, social assistance, or administrative reforms, to stabilize public accounts. Lacerda also noted that legal uncertainty stemming from the Supreme Federal Court (STF) has impacted the cost of money and interest rates in the country.