Haddad: Brazil enters 2026 with its best fiscal result in four years.

247 - Finance Minister Fernando Haddad said on Tuesday (4) that Brazil is experiencing a moment of economic stability and should end President Luiz Inácio Lula da Silva’s term “in 2026, in a calm manner”. The statement was made during the opening of the Bloomberg Green Summit, in São Paulo.

According to the minister, the country has accomplished "many important things to create a favorable business environment — and this is already being noticed by investors." He cited the high number of infrastructure auctions held on the B3 stock exchange in recent years and the progress in structural reforms as key factors in this environment.

According to Haddad, the ongoing tax reform could increase the Gross Domestic Product (GDP) by between 12% and 20% in the coming years. He also emphasized that the next stage of income tax reform is an essential part of a process to reduce inequality: "There is no growth with inequality."

Fiscal results and market outlook

Haddad stated that the government will deliver the best fiscal result in the last four years, even after settling liabilities inherited from the previous administration. The minister cited that the country will have "the lowest inflation in four years, the lowest unemployment in the historical series, and the highest growth since 2020." He also guaranteed that he does not intend to change the primary target for the year. "They are saying that I will change the target because I will not meet it from 2023 onwards. Either we look at the reality of Brazil and row in the country's favor, or we will continue to be trapped by narratives," he said.

In his view, the discussion about public finances is being led "by investors, not by newspapers." He added, "What worries me is the money that is flowing into Brazil."

Interest rates, production, and the economic environment.

The minister reiterated his call for an urgent reduction in interest rates, arguing that the current level is unsustainable. "It's impossible to maintain a 10% real interest rate with 4,5% inflation. I'm allergic to inflation, but there's a question of reasonableness. The dose of the medicine can become poison," he compared.

According to Haddad, Brazil has the conditions to grow consistently by controlling its debt and reducing financial costs. “We can finish our term with much better indicators. We don't need to pay such high interest rates—this even affects the country's production capacity.” He criticized part of the financial market: “Expectations in Brazil are largely based on wishful thinking. I see people rooting against the country, and that's astonishing.” 

Regarding fiscal targets, he emphasized: “We are determined to do what hasn't been done since 2015: respect the primary surplus targets, set demanding objectives, and meet them.” Furthermore, he commented on the Supreme Federal Court (STF) ruling that could extend the application of the Fiscal Responsibility Law to the Legislative branch: “It will be a revolution if Congress cannot create expenses without indicating the source of revenue.”

Regarding the political negotiations, he stated: “It’s easier to convince ten people on the economic team than 513 members of parliament, but we are moving forward patiently and at the pace that the economy allows.”

Energy transition and green investments

At the opening of the event, Haddad highlighted that Brazil possesses “competitive advantages aligned with the climate agenda.” He stated: “Regardless of what Bill Gates thinks, Brazil has clean and cheap energy. It makes no sense to exchange it for dirty and expensive energy.”

The minister recalled that the country has a 40-year tradition in biofuels: "Brazil has a 40-year tradition in biofuels, and we will not abandon this agenda." He also mentioned the creation of the Forest Bank—a project supported by the World Bank—as a priority for the Brazilian presidency of COP30. 

“If we get this fund up and running, we will have practical and efficient results. Preserving forests is good for everyone, always, and at a very low cost compared to the benefits,” he concluded.