Brazil’s public debt ratio has risen to 81.9% of GDP under President Luiz Inácio Lula da Silva, up more than 10 percentage points since 2023, according to campaign adviser Adolfo Sachsida. Flavio Bolsonaro, a senator and son of former President Jair Bolsonaro, has proposed a constitutional debt ceiling that would automatically impose spending restraints if gross public debt exceeds 65% of GDP.
The mechanism would mirror the fiscal framework adopted during former President Michel Temer’s administration in 2016, which initially capped federal expenditure growth to inflation but was later weakened through exceptions. Sachsida, a lawyer and economist who serves as Bolsonaro’s senior campaign adviser, stated on social media that the proposal aims to place Brazil’s fiscal trajectory on a sustainable path by tying spending limits directly to debt levels.
Under Brazil’s current fiscal rules, introduced in 2023, real public spending growth is permitted to rise by 0.6% to 2.5% annually. Bolsonaro’s campaign has floated reducing this to 1.5% as part of broader fiscal tightening measures. The proposal would replace Lula’s framework with a more rigid constraint, potentially capping real spending growth at zero if debt breaches the 65% threshold.
The presidential election is scheduled for October 4, 2026, with a potential runoff on October 25 if no candidate secures a majority. Bolsonaro’s campaign has not yet detailed how the debt ceiling would interact with Brazil’s existing fiscal rules or the timeline for legislative approval.
