Brazil's presidential runoff campaign is entering its final stretch, with both Lula and Flavio Bolsonaro focusing fiscal plans on politically palatable measures rather than structural reforms. Gross debt has risen by more than 10 percentage points under Lula to 82.9% of GDP. Bolsonaro promises faster adjustment, targeting a 1.5% of GDP improvement in the primary balance within 18 months, though his campaign has not explained how, while Lula pledges slower consolidation without cutting spending for lower-income Brazilians. Economists say the core problem is rapidly growing mandatory spending, with discretionary spending only about 7.6% of total outlays last year versus 14.2% in 2000. Analysts expect deeper reforms on benefit indexation and mandatory spending to wait until after the election.
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