Brazil’s opposition is preparing a fiscal framework that would cap gross public debt at 65% of GDP, with an automatic spending cap if the threshold is exceeded. The proposal, outlined by Senator Flavio Bolsonaro’s campaign, aims to constrain expenditure growth and prevent further deterioration of the country’s debt position.
The framework, announced by campaign adviser Adolfo Sachsida in a video posted Wednesday, would limit real spending growth to zero if the debt ceiling is triggered. Under current rules, real expenditure growth is capped at 0.6% to 2.5% annually, with officials recently discussing reducing the upper limit to 1.5%.
Brazil’s gross public debt currently stands at 81.9% of GDP, an increase of more than 10 percentage points since President Luiz Inacio Lula da Silva took office in 2023. The debt ratio last fell below 65% in November 2015, before the 2016 constitutional spending cap introduced by former President Michel Temer took effect.
The proposal comes ahead of the October 4 presidential election, with a potential second-round runoff scheduled for October 25 if no candidate secures a majority. The campaign’s economic team, including Sachsida, has emphasized fiscal discipline as a central pillar of its platform.
