Lula Pledges Spending Cuts Following Meeting with Business Leaders and Bankers

President Luiz Inácio Lula da Silva promised to cut expenses and pursue a primary surplus goal for 2027 during a dinner at the Palácio do Alvorada with bankers and business leaders. The government estimates a primary surplus of R$ 18.6 billion for 2027, which is approximately 0.13% of the GDP. To achieve this, the administration must improve accounts by R$ 70.6 billion compared to the current year, which has a projected deficit of R$ 52 billion.

During the meeting, guests expressed concerns regarding high interest rates, high levels of delinquency, and the political appointment process within regulatory agencies such as Cade and the CVM. Lula responded by stating he would seek conditions for a sustained drop in interest rates under the leadership of the Central Bank. He specifically denied rumors that Central Bank chief Gabriel Galipolo was viewed as a traitor, noting that while he is frustrated with the pace of interest rate cuts, he continues to count on Galipolo.

Lula also addressed fiscal responsibility, mentioning the figures from Jair Bolsonaro's government as evidence of his efforts. He criticized mandatory amendments in Congress and noted that the government's dependence on the Senate for board compositions complicates integrated management between ministries and agencies. In response to concerns about public safety, Lula promised the creation of a Ministry of Public Security.

Notable attendees included André Esteves of BTG Pactual, Roberto Setúbal of Itaú Unibanco, and Luiz Carlos Trabuco Cappi of Bradesco. The guests requested greater stability to facilitate investments in reindustrialization, energy transition, and the exploration of rare earths and oil in the Equatorial Margin.