Home›Forex›EM Currencies›Lula win in Brazil election seen raising fiscal risk,…

Lula win in Brazil election seen raising fiscal risk, per Societe Generale

Societe Generale assigns a 65% probability to Lula winning in 2026 and says the outcome would likely bring looser fiscal policy, rising debt, and continued state intervention.

Reported · Written up by our desk · EM Currencies

Societe Generale analysts Brendan McKenna and Dev Ashish outlined scenarios for Brazil’s 2026 election, assigning a 65% probability to President Luiz Inacio Lula da Silva winning a fourth term and a 30% probability to Flavio.

In their view, another Lula administration would likely mean looser fiscal policy, higher debt, and continued state intervention, with the composition of Brazil’s congress seen as a key factor for the country’s debt trajectory and broader macro stability.

The note was published as part of FXStreet Insights, alongside other market commentary tied to recent macro data, including moves in GBP/USD and EUR/USD around US CPI, and gold reversing weakness after inflation data in July matched expectations.

In the same package, FXStreet Insights also cited a decline in Ripple during August, though the election-focused analysis centered on how Brazil’s politics could affect fiscal risk and macro stability under a new Lula term.

Latest closeGold $4,430.80 ▲1.6%|EUR/USD 1.155 ▼0.1%|GBP/USD 1.351 ▲0.1%

More like this

Sources