Macro-financial risk
2026-04-26
9 minute read
5 sources
Brazil fiscal trajectory 2026: the framework, the markets, and the political constraint
Brazil enters 2026 with a credible monetary anchor but a fiscal framework that markets are testing in real time. The next eighteen months will determine whether the Arcabouco holds or whether the curve forces an earlier reckoning.
Brazil heads into the second quarter of 2026 with gross general government debt approaching 81 percent of GDP, a primary deficit that has narrowed but not closed, and a Selic rate held at restrictive levels by a Banco Central do Brasil intent on protecting hard-won inflation gains. The Arcabouco Fiscal, the spending growth rule that repla...