Lula’s Fourth Term Could Worsen Brazil’s Fiscal Risks, SocGen Warns

Societe Generale analysts Brendan McKenna and Dev Ashish have outlined election scenarios for Brazil in 2026, highlighting the potential for increased fiscal pressure. They assign a 65% probability to President Lula securing a fourth term, a result they warn could deepen the country’s fiscal risks.

The bank gives a 30% chance to an opposition candidate winning the presidency. The analysis suggests that a Lula victory would likely weigh on Brazilian assets as markets price in looser fiscal policy.