Debt, inflation and a hostile Congress: the economic challenges of Lula’s fourth term

MercoPress · 26/10/2026, 13:29:00

Luiz Inácio Lula da Silva will begin his fourth term as Brazil’s president on January 1 with an economy that has grown more than expected and record-low unemployment, but with fiscal imbalances that markets punished heavily on Monday, the first trading day after his re-election. The dollar rose more than 12% at one point to 5.60 reais, the Ibovespa index triggered an automatic trading halt at the open and long-term interest rates jumped almost two points.