Brazil’s opposition campaign led by Senator Flavio Bolsonaro has outlined a fiscal plan that would impose a public debt ceiling, with an automatic spending cap if the threshold is exceeded. The proposal, presented by economist Adolfo Sachsida, sets a gross public debt limit of 65% of GDP, beyond which real growth in government spending would be frozen to prevent further deterioration.
The plan targets a debt-to-GDP ratio currently at 81.9%, an increase of over 10 percentage points since President Luiz Inácio Lula da Silva took office in 2023. Sachsida, who joined Bolsonaro’s economic team, first detailed the framework in a video posted on X and later on Substack. The proposal mirrors elements of Brazil’s 2016 constitutional spending cap, which limited federal expenditure growth to the prior year’s inflation rate under former President Michel Temer.
Under current fiscal rules, primary balance targets allow real expenditure growth between 0.6% and 2.5% annually. Recent discussions among officials have floated an upper limit of 1.5% real growth. The Bolsonaro campaign’s debt ceiling is designed to reinforce fiscal discipline by linking spending directly to debt sustainability, a response to rising debt levels that last fell below 65% of GDP in November 2015.
The proposal comes ahead of the October 4, 2026 presidential election, where Flavio Bolsonaro is challenging Lula, who began his most recent term in 2023. If no candidate secures a majority in the first round, a runoff is scheduled for October 25, 2026.
