Lula's 2026 Plan: Fiscal Rules and Lower Rates

What Does Lula's 2026 Government Plan Promise on the Economy?

The re-election campaign of President Luiz Inácio Lula da Silva (PT) has released its government plan, placing fiscal responsibility and inflation control at the centre of its economic agenda. The document commits to keeping the current fiscal framework — known as the arcabouço fiscal — in place if Lula wins a third term.

What Is the Arcabouço Fiscal?

Brazil's fiscal framework, introduced during Lula's current term, sets rules for government spending growth tied to revenue performance. It replaced the old spending cap and aims to gradually improve public finances. Maintaining it signals continuity rather than a sharp policy shift after the 2026 election.

Will Interest Rates Come Down?

One of the headline pledges in the plan is creating conditions for a sustained reduction in interest rates. Brazil's benchmark Selic rate has been among the highest in the world in real terms, weighing heavily on consumers, businesses and public debt costs. The plan argues that keeping inflation under control and honouring fiscal rules are the preconditions for rates to fall over time.

Why Does This Matter for Expats and Investors?

For foreign investors and expats holding assets in Brazil, the commitment to fiscal discipline and lower rates would affect the real (BRL) exchange rate, credit costs and the overall investment climate. A stable macro environment is typically positive for equities and real estate. However, promises made in campaign documents do not guarantee policy outcomes — implementation will depend on the political and congressional landscape after the election.