Lula’s Fourth Term Could Worsen Brazil’s Fiscal Risks, SocGen Warns
Societe Generale sees a 65% chance President Lula wins a fourth term in 2026, a scenario that may deepen Brazil’s fiscal risks, while assigning a 30% probability to an opposition victory.
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.
Source: FXStreet Forex News
