Lula’s fourth term faces five economic tests in Brazil

Brazilian President Luiz Inácio Lula da Silva faces five major economic challenges after winning a fourth term, including rising public debt, high interest rates, and political hurdles, despite recent economic growth. His victory over conservative challenger Flávio Bolsonaro secures another term, but a conservative-led Congress may complicate his agenda. Public debt has surpassed 82% of GDP, leaving limited budget flexibility, while interest rates remain at 13.75% and inflation at 4.6%, above the central bank’s target. Nearly 84 million Brazilians and 9.3 million businesses are behind on debt payments, fueling dissatisfaction despite record-low unemployment. Lula’s plans include debt relief and a consumption tax overhaul, but the effective tax rate remains undisclosed ahead of a January implementation. Analysts warn that temporary relief measures may not address underlying indebtedness, and a conservative Congress could obstruct fiscal reforms and key appointments.