Economists Say Lula Speech Was 99% Focused on Spending

President Luiz Inácio Lula da Silva delivered a national radio and television address on Sunday, November 8, 2026, where he reaffirmed campaign promises that expand public spending while leaving analysts concerned over economic stability.

Reelected for a fourth term, the president announced plans to eliminate taxes on the basic food basket and send a proposal to Congress aimed at zeroing public transport fares on weekends.

Lula also highlighted recent administration measures, including the exemption of income tax for individuals earning up to R$ 5,000, the approval of the end of the 6×1 work scale in the Senate, and the prohibition of betting platforms known as bets. The address followed a presidential election marked by record voter turnout and the lowest abstention rate in recent years.

During the speech, Lula stated that the trajectory of public debt and high interest rates concern him. He reaffirmed his commitment to fiscal responsibility to support sustainable social policies and investments, all while preserving existing fiscal rules, as reported by G1.

Economists quickly pointed out that the address lacked concrete details on how the government intends to control public expenditures. Sérgio Vale, chief economist at MB Associados, stated that 99 percent of the speech focused on increasing spending. Vale noted that the remaining one percent mentioned fiscal responsibility rather than an actual fiscal adjustment.

Roberto Troster echoed these concerns, stating that the president only announced more spending and that no initiative conveyed genuine concern about the upward trend in public debt.

Vale warned that the administration’s approach risks paving the way for an economic crisis comparable to the downturn of 2015. He highlighted that expectations of economic growth will likely fail to resolve the looming fiscal pressure, given that the population remains heavily indebted and interest rates have stayed elevated for a long period.

Lula reiterated campaign pledges to implement free weekend public transport, fund the Pé de Meia Universitário program, and eliminate the tax on the basic food basket starting next year.

Economists Sérgio Vale and Roberto Troster criticized the speech for focusing heavily on increased spending without presenting concrete fiscal adjustments or measures to control rising public debt.

According to Sérgio Vale, financial markets are likely to react negatively with a drop in the stock market alongside increases in the dollar and future interest rates due to anticipated economic deceleration.

How will the government balance its new social spending initiatives with the growing national debt in the coming months?