Brazil's federal debt reached 82.5% of GDP (the value of everything the country produces in a year) in July, its highest level since April 2021, according to Central Bank data cited by Poder360 and reported by O Globo and CNN Brasil. For household budgets, that means costlier credit: analysts heard by g1 say repeated deficits push up interest rates, which set the price of mortgage, car and credit card payments. Four weeks before the first round of the presidential election, the two poll leaders, President Luiz Inácio Lula da Silva of the Workers' Party and Senator Flávio Bolsonaro of the Liberal Party, are offering rival plans for the public accounts.
To picture the size of the debt, think of a family earning 5,000 reais a month, or 60,000 a year: it would owe 49,500 reais. Since the current government took office in 2023, the debt load has risen by 10.8 percentage points, about 6,500 reais of extra debt in that household comparison. A survey by Poder360 published on Sunday (Sept. 6) compares the two candidates' proposals, and economists heard by the site conclude that neither plan is enough to change the debt's path.
What each candidate proposes
Lula wants to keep the fiscal framework, the rule that caps the growth of government spending, and balance the books from the revenue side, betting on economic growth, spending efficiency and more taxes. His program promises to maintain and expand social protection (the Bolsa Família stipend, the BPC income benefit, housing and the Pé-de-Meia savings program for students) and to raise public investment. Alexandre Schwartsman, a former Central Bank director, sums up the criticism by calling the package a "loose budget" with little concern for reining in expenses.
"The fiscal framework that was implemented, besides being insufficient, carries no consequences when it is broken. It is as if it did not exist", said Bruno Perri, chief economist and founding partner of Forum Investimentos.
Flávio Bolsonaro goes the opposite way: a new fiscal rule, primary surpluses (collecting more than the government spends, before interest payments) and a sweeping cost-cutting drive Brazilians call a "tesouraço", with at least 10 ministries eliminated, fewer political appointee posts and a crackdown on "penduricalhos", the extra perks added to civil servants' pay. The plan would also resume privatizations and the administrative reform. According to Poder360, the document does not say how much would be saved, and it still promises to double public security investment and cut taxes, which adds doubts about whether the numbers add up.
In plain terms: the gross debt is everything the federal government owes, and the fiscal framework is the rule designed to keep spending growth within a limit. In recent years the government opened room for spending outside that limit, weakening the rule's credibility. Perri adds another problem with Flávio's math: privatizations are one-off revenue, because assets are sold only once.
Record revenue, rising debt
The squeeze coexists with record tax collection: the federal government expects to collect 3.24 trillion reais this year, 23.7% of GDP, the highest level in the Treasury's historical series, which began in 1997 and whose previous record was 2010 (23.6%), in Lula's own second term. In everyday terms, for every 100 reais of wealth produced in Brazil, 23.70 go to the federal coffers, against an average of 21.40 over the previous 29 years, according to g1. Even so, Rafaela Vitória, chief economist at the bank Inter, said 2026 should still end with a primary deficit near 0.5% of GDP, worse than 2025, while the proposed 2027 budget projects a surplus of just 18.6 billion reais, under 1% of annual revenue.