An economic adviser for Senator Flavio Bolsonaro’s presidential campaign has announced plans to institute a debt ceiling if Bolsonaro wins the October 2026 election in Brazil. Adolfo Sachsida, a lawyer and economist who recently joined Bolsonaro’s economic team, stated on social media that the debt ceiling would help improve Brazil’s fiscal reputation and rein in government spending.

Sachsida explained that if Brazil’s gross public debt exceeds 65 percent of GDP, automatic spending cuts would be triggered, putting the fiscal trajectory on a sustainable path. He referenced a similar debt ceiling rule that had been adopted in Brazil in the recent past but was weakened several times before being replaced by a new fiscal framework implemented by President Lula in 2023. Lula’s framework combines primary balance targets with controlled increases in real expenditure ranging between 0.6 percent and 2.5 percent annually.

The announcement comes amid a tight presidential race, with Lula holding a slim lead over Flavio Bolsonaro. Bolsonaro has also named Alfredo Gaspar as his running mate. Meanwhile, the elder Bolsonaro, Flavio’s father, was accused of leading a coup attempt after losing his re-election bid to Lula in 2022.

A debt ceiling could lead to automatic spending cuts, which conservatives might use to reduce social programs, according to analysts.

Sources