BRAZIL · ELECTION ECONOMY
Key Facts
- —The country Brazil, Latin America’s largest economy, votes in a presidential runoff on Sunday 25 October 2026 between President Lula and Senator Flávio Bolsonaro.
- —Why it matters The primary balance, the budget result before interest, shows how safe Brazilian debt looks to US holders of bonds, shares and ETFs, and both campaigns use it.
- —Why now A Lula primary surplus claim, that he is the only president to leave surpluses in eight straight years, spread on Sunday 18 October 2026, after the first runoff debate.
- —What happened Central government accounts show surpluses in every year from 2003 to 2010, but deficits in 2023, 2024 and 2025 in his current term.
- —The numbers Surpluses ran from R$39.1 billion (about US$7.7 billion) in 2003 to R$77.9 billion (about US$15.3 billion) in 2010, about 2.1% of GDP on average.
- —What it means for you US investors get a reminder that the surplus streak ended in 2014 and that a record from 2003 to 2010 is not a forecast for the next government.
- —Still open Whether the projected 2027 surplus holds, since budget targets of balance for 2024 and 2025 ended in deficits.
- —Prediction markets Polymarket gives Flávio Bolsonaro a 78.7% chance and Lula 21.5% of winning the 25 October runoff (19 October, 12:59 a.m. ET). Polymarket puts Flávio Bolsonaro’s chance of winning at 79% and Kalshi at 79% (Lula: 22% and 21%), as of 19 October, 1:20 am ET; prices are bets, not polls.
- —Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
Runoff · Sunday, 25 October
Brazil Runoff 2026: Lula vs Flávio
Date, polls, debates, odds and how the runoff works, updated every day.
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A Lula primary surplus claim spread on Sunday 18 October 2026, a week before the Brazil election 2026 runoff. National Treasury data confirm eight straight surpluses from 2003 to 2010, but his current term has run deficits since 2023.
For US holders of Brazilian bonds and shares, the primary balance, meaning revenue minus spending before interest, shows how comfortably the state can carry its debt. The latest Brazil election polls and Brazil election odds frame the vote, and the Brazil runoff date is Sunday 25 October.
What the Lula Primary Surplus Claim Says
The claim appeared in Revista Fórum, a Brazilian news site that runs a series of favourable “Efeito Lula” stories, at 10:33 p.m. Brasília time on Sunday 18 October. Fórum wrote that Lula repeated it at the Band debate that evening and had made the same point in a Globo interview on Thursday 15 October.
We found no second outlet carrying the remark, and the Agência Lupa live fact check of the debate does not list it among the statements it checked. We therefore treat it as a campaign talking point and test it against official data.
Fórum’s wording is that Lula was the only president to register a primary surplus in each of the eight years of his first two terms, at roughly 2.5% to 3.0% of GDP. Its table runs from R$38.7 billion (about US$7.6 billion) in 2003 to R$78.7 billion (about US$15.5 billion) in 2010.
Dollar figures here use the Brazilian central bank’s PTAX selling rate of 5.0826 reais per US dollar on Friday 16 October 2026, the latest published. Applying today’s rate to historical amounts gives a sense of scale only.
What the Treasury Series Shows
The National Treasury’s historical series, updated to July 2026, records a central government primary surplus in every year from 2003 to 2010. Measured above the line, the yearly result ran from R$39.1 billion (about US$7.7 billion) in 2003 to R$77.9 billion (about US$15.3 billion) in 2010.
Above the line means revenue minus spending as the Treasury counts it, while below the line means the change in net debt measured from central bank data. Both methods show a surplus in each of the eight years, and Fórum’s table matches the below-the-line figures.
The weakest year by share of output was 2009, when the global financial crisis cut the surplus to 1.2% of GDP. The strongest by that measure was 2004, at 2.5%.
Across the eight years the surplus averaged about 2.1% of GDP above the line and about 2.2% below it. Fórum’s range of 2.5% to 3.0% does not match this central government series, and the article does not say which measure it used.
How Far the Streak Extends
The same file shows surpluses in every year from 1998 to 2013 on both measures, so Lula’s eight years sit inside a longer run. It began under Fernando Henrique Cardoso, Lula’s predecessor, and ended in 2014 with a deficit of R$23.5 billion (about US$4.6 billion) in Dilma Rousseff’s first term.
On this evidence the claim is consistent with the data, because no other president in the file has eight years in office without a deficit. The file starts in 1997, so it cannot test the first two years of Cardoso’s presidency.
The primary balance leaves out interest on public debt, so a primary surplus does not mean the overall budget was in the black. Fórum’s article gives neither the interest bill nor the debt level for 2003 to 2010.
The Current Term Looks Different
The Treasury file shows a central government deficit of R$228.5 billion (about US$45.0 billion) in 2023, or 2.1% of GDP, in Lula’s first year back. Agência Lupa noted that R$92.4 billion (about US$18.2 billion) of court-ordered debts, known as precatórios, was paid that December.
The file puts the 2024 deficit at R$42.9 billion (about US$8.4 billion) and the 2025 deficit at R$61.7 billion (about US$12.1 billion), or 0.4% and 0.5% of GDP. Lupa cited R$47.6 billion (about US$9.4 billion) for 2024, a figure that differs from the Treasury file for reasons the sources do not explain.
Lula said at the same debate that Brazil is presenting a budget with a 0.1% surplus, which Lupa rated true for the R$18.6 billion (about US$3.7 billion) in the 2027 budget bill. Lupa added that earlier targets of balance for 2024 and 2025 ended in deficits, so a projection is not a result.
Lupa rated false Lula’s remark that the previous government left a 2.8% deficit, since the 2022 central government result was a surplus, R$54.1 billion (about US$10.6 billion) in Lupa’s figure and R$46.4 billion (about US$9.1 billion) above the line in the Treasury file. Lupa added that delayed precatório payments under Jair Bolsonaro, Flávio’s father, helped that surplus.
Other Records Fórum Lists
Fórum said Lula’s third term has set records in 43 economic and social indicators, including unemployment of 5.1% in December 2025 and a grain harvest forecast at 361.7 million tonnes for 2025/26. It also lists oil output of 4.6 million barrels a day in August 2026 and a wage bill of R$332.7 billion (about US$65.5 billion).
We checked one figure from the same article, the September trade surplus of US$7.74 billion, which Agência Brasil confirmed from the trade ministry’s release of 6 October. Agência Brasil called it the second best for a September, behind US$9.18 billion in 2023.
We did not open the primary releases for the other indicators, so they remain Fórum’s figures. Treat them as the case one side makes a week before the vote.
What It Means for You
For US investors in Brazilian bonds, the real or New York-listed Brazilian shares, the useful point is the direction of the primary balance, not the record from 2003 to 2010. The Treasury file shows deficits in each year from 2014 to 2021 and again from 2023 to 2025, with a surplus only in 2022.
As we reported in Lula and Flávio Clash in First Runoff Debate, both candidates used the debate to argue over debt and public spending. See also Lula vs Flávio: Where They Stand on 7 Issues for their positions on the economy.
The winner’s first budget will show how the next government treats the primary balance. Travellers feel fiscal policy mainly through the exchange rate and prices, not through the primary balance itself.
What Is Not Known
It is not confirmed that Lula used these exact words at the Band debate, because only Fórum carries the remark. The Treasury series also cannot test 1995 and 1996, the first two years of Cardoso’s presidency.
We do not know which GDP share Fórum used for its 2.5% to 3.0% range, since the central government series gives about 2.1% to 2.2%. It is also unknown whether the surplus argument moves any voters before the runoff.
No official full-year result for 2026 exists yet, so it is open whether this year ends in surplus or deficit. The Treasury publishes monthly results, and each release updates the picture.
What Prediction Markets Say
On Polymarket, an online prediction market, bettors give Flávio Bolsonaro a 78.7% chance of winning the 25 October runoff and Lula 21.5% (19 October, 12:59 a.m. ET). The Brazil Presidential Election event has drawn about US$187.8 million in bets, with US$26.5 million on Lula and US$22.8 million on Flávio.
These are bets, not polls, and prices can move within minutes of news such as a debate. They are not a forecast of the result.
Prediction markets · who wins the runoff
Implied chance of winning Brazil’s presidency on 25 October, from traders’ prices.
Polymarket
Flávio Bolsonaro 78.5% · Lula 21.5% (US$188 million traded)
Kalshi (regulated in the US by the CFTC)
Flávio Bolsonaro 79% · Lula 21%
As of 19 October, 1:20 am ET (06:20 Lisbon), updated every 20 minutes. Prices are bets, not polls, and can move fast.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Frequently Asked Questions
Is Lula the only Brazilian president with eight years of primary surplus?
Treasury data show surpluses in every year from 2003 to 2010, and no other president in the series has eight years in office without a deficit. The series starts in 1997, so it cannot test the first two years of Cardoso’s presidency.
Does the Lula primary surplus record cover his current term?
Not so far, according to the Treasury file, which shows deficits in 2023, 2024 and 2025. They were 2.1%, 0.4% and 0.5% of GDP.
What is a primary surplus?
It is government revenue minus spending before interest on public debt. A primary surplus can sit alongside an overall deficit once interest is counted.
Who published the claim?
Revista Fórum published it on Sunday 18 October and said Lula repeated it at the Band debate. We found no second outlet carrying the remark.
When is the Brazil runoff?
Brazil votes on Sunday 25 October 2026 in the runoff between Lula and Flávio Bolsonaro. The electoral court, the TSE, announces the official result after the count.
Sources: Revista Fórum, 18 October 2026; National Treasury, historical series of the central government result (July 2026 edition); Agência Lupa, live fact check of the Band debate, 18 October 2026; Agência Brasil, 6 October 2026; Banco Central do Brasil, PTAX rate of 16 October 2026.
This article was drafted with automated assistance and reviewed before publication. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief