Lula: growth, not public debt, is the priority
The president argued that a faster economy will bring the debt-to-GDP ratio down on its own.
President Lula said this week that the level of public debt is not his main worry, and that his focus is on growth. Faster expansion, he argued, is what ultimately lowers the debt-to-GDP ratio.
The comments landed the same day the Treasury reported a July primary surplus alongside a year-to-date deficit, and a week after market forecasts for 2026 growth were trimmed to just under 2%.
The arithmetic is not wrong in principle: a higher denominator does shrink the ratio. The market's objection is about sequencing and credibility, since interest costs at a 14% Selic compound faster than a 2% economy grows.
Expect the remark to feature in the September rate discussion, where fiscal signals are weighed alongside the inflation data.