Brazil

Research evidence excerpt

Vinicius Moreira (55-11) 4950-3195

Banco J.P. Morgan S.A.

Mirella Sampaio (55-11) 4950-3289

Banco J.P. Morgan S.A.

Gustavo Ribeiro (55-11) 4950-4059

Banco J.P. Morgan S.A.

Brazil

The 2026 electoral race starts this weekend; voting

occurs on the first and last Sundays of October

President Lula and Flávio Bolsonaro are the leading

candidates

Whoever wins will inherit a series of challenges, particularly on the fiscal front

Ahead of the election, the BCB is likely to pause its

calibration cycle after a final 25bp cut in September

The 2026 general election will formally begin this weekend,

with the deadline for the registration of candidacies before the

Electoral Court (TSE) due on Saturday and the official start

of political advertising on Sunday. At this point, President

Lula — running on a unified left-wing ticket — is polling

ahead of Flávio Bolsonaro, whose right-wing bloc remains

divided, with an average margin of about 5–6 percentage

points in runoff simulations (Figure 1). Other candidates are

polling below 10%, well behind Lula and Flávio. Our base

case is that this will be a tight race, likely to be defined by the

late-stage campaign between the two leading candidates.

Figure 1: Runoff vote intention

F. Bolsonaro

% of the total votes, aggregated from various polls

49

Lula

47

45

43

41

39

37

35

Jul-25

Sep-25

Nov-25

Jan-26

Mar-26

May-26

Jul-26

Sep-26

Source: JOTA and J.P. Morgan

The challenges for the next administration are diverse: fiscal,

geopolitical, technological, and economic. Among these, the

fiscal dynamics have been the main source of concern. The

country’s public accounts are strained by a high tax burden

and rigid spending, compounded by high interest rates and

elevated debt-to-GDP. This combination, alongside low

potential growth, makes it harder for any administration to

steer toward a more balanced fiscal path.

Outside of the brief stability in 2018-2019 and the post-pandemic correction, public debt has been mostly on the rise

since the end of 2013, at the peak of the commodity supercycle (Figure 2). Since then, the tax burden has returned to its

historical peak, with federal revenues close to 23% of GDP,

…