Brazil's Lula administration defends fiscal policy amid market criticism

Brazil's Treasury spending rose 10% over the 12‑month period ending in May, an increase five times faster than GDP growth, according to the finance ministry. Officials say the surge reflects temporary measures to counter external shocks and that fiscal policy is not the main driver of the country’s high Selic rate.

Finance Minister Dario Durigan and other senior ministers have met with financial market leaders, seeking to reject comparisons between Lula’s fiscal actions and those of former President Bolsonaro. They argue the government has avoided expanding programs such as Bolsa Família, has negotiated fuel‑price measures with governors, and is pursuing responsible fiscal management while confronting inflationary pressures.