Brazilian President Luiz Inácio Lula da Silva said on Sunday that high interest rates and the trajectory of public debt worry him. In his first national radio and television address since his re-election, he pledged to create the conditions to bring rates down. He did not announce concrete measures to contain spending.
Lula said he reaffirmed his commitment to fiscal responsibility, which he framed as the basis for sustainable social policy and for expanding investment. He set a target of 20 percent of GDP for investment and said it would be raised above that level in partnership with the private sector.
Debt and household relief
Gross government debt stood at 82.9 percent of GDP in September, up from 71.38 percent in January 2023. Lula did not say how the government intends to bend that curve.
He also promised measures for household debt, including government purchases of family debt from banks and forgiveness of MEI debt owed to the federal government. He gave no amounts and no deadlines.
Proposals still under review
Finance Minister Dario Durigan said Lula would decide on fiscal measures only after returning from international travel, including the COP31 leaders’ summit in Turkey and the Asean summit in the Philippines. The proposals are still under analysis.
Lula also announced a provisional measure to create a Ministry of Public Security, to follow approval of the PEC da Segurança Pública. He called for urgent political and judicial reform and criticised big tech platforms over alleged election interference.
