Synthesis of the Brazilian Economy

BRAZIL ECONOMICS - Report 10 Mar 2025 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

OVERVIEW

HARVESTS OF A PT ADMINISTRATION FOR THE PT

The devastating decline in Lula’s popularity consolidates his worst moment across all his terms, with the gap between those who disapprove (49%) surpassing, for the first time, those who approve (47%) of his government. According to data from Quaest, disapproval exceeds 60% in the three largest electoral colleges in the country: São Paulo, with 69%; Minas Gerais, with 63%; and Rio de Janeiro, with 64%. Even in PT strongholds like Bahia and Pernambuco, dissatisfaction has increased by 18 and 17 percentage points, respectively, over two months, hovering around 50%.

Lula is reaping what he sowed during the first two years of his government, and bitter fruits will result from his insistence on making mistakes. The repetition of Dilma’s "spending is life" model has been producing predictable consequences with an increase in public debt, country risk, inflation, and interest rates. Signs of economic slowdown began to appear at the end of last year, as will be discussed later, but the government seems intent on repeating past mistakes, which tends to keep its popularity low.

Food inflation, which mainly affects low-income families, is the trigger for the rise in popular discontentment. However, dissatisfaction has deeper and more permanent roots and is linked to the state's failure to provide basic services to the population. The areas of security and health are the main sources of complaints in the surveys.

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