R$ 290 billion. That is the size of the bill for measures adopted by President Lula's government with an eye on the election, according to a tally by Folha de S.Paulo published on Saturday (17). Adding the amounts planned for 2026 and 2027, the total works out to roughly R$ 1,400 per Brazilian resident, and much of it is set to swell a public debt that ordinary people pay for through high interest rates.
The debt was already climbing before the package. In August, Brazil's gross general government debt reached 82.9% of GDP (gross domestic product, the sum of everything the country produces), the highest level in five years, according to the story by reporters Idiana Tomazelli and Guilherme Pimenta.
Understanding gross public debt
The gross general government debt, known in Brazil as DBGG, is everything the federal government, states and municipalities owe, minus what they hold in assets. It works like a household budget: the bigger the debt compared to income, the more expensive credit becomes. For the government it is the same, and the high rates investors charge end up raising the cost of mortgages and car loans for everyone.
Preliminary calculations by the IFI (Instituição Fiscal Independente, the Senate's independent fiscal watchdog) indicate the package could add 1.2 percentage points to the debt by the end of 2027. Back in June, before some of the announcements, the IFI already projected the indicator would hit 86.4% of GDP in December next year.
What is in the bill
The list compiled by Folha includes fuel subsidies announced in March after the outbreak of the war in Iran and renewed since then, plus credit lines for economic sectors, home buying and the purchase of cars and trucks. It also counts Lula's most recent promises: expanding the Pé-de-Meia savings program to university students, a Pix instant payment of R$ 5,000 to individual microentrepreneurs (known as MEIs) and free public transport fares on weekends.
The MEI benefit is part of the Prospera MEI package, which also forgives R$ 12.6 billion in debts owed to the federal government. According to Poder360, the government estimates the measure, approved by the Senate on Thursday (15), will reach 3.6 million entrepreneurs.
The Planning and Budget Ministry said in a statement that the listed initiatives have different natures, funding sources and execution periods. Economists consulted by Folha believe a fiscal adjustment of at least R$ 250 billion will be needed in the next term to stabilize the debt. Without that effort, investors are likely to keep charging high interest rates to finance the country.