Business · Economy · 7 hrs ago
Rodrigo Azevedo warns Brazil may face a disorderly fiscal adjustment
Ibiúna co-founder Rodrigo Azevedo says Brazil has lost its chance for gradual fiscal adjustment and may face a sharper correction instead.
He spoke at a business conference in Chicago, where economists discussed Brazil’s economic outlook.
Azevedo said investors no longer trust promises of gradual change, pointing to earlier spending rules that he said did not work.
Brazil’s public debt is now about 83% of GDP, and UBS economist Solange Srour warned that it could rise by more than four percentage points a year if interest rates stay high and growth remains weak.
Azevedo warned that without an orderly plan, the currency could fall and inflation could rise, hurting the economy.
Srour argued that a credible plan should slow the growth of mandatory public spending, which makes up about 90% of the budget.
The discussion offered no new government decision or next step; the speakers focused on the risks and choices facing Brazil.
Rodrigo Azevedo of Ibiúna Investimentos warned that Brazil may face a sharp fiscal adjustment because investors no longer trust gradual plans.
He said there are not the political conditions for an orderly adjustment and warned that a disorderly one could send the exchange rate and inflation higher and weaken the economy.
Solange Srour of UBS said high interest rates and low growth could add more than four percentage points of GDP to public debt each year.
Srour argued that an adjustment should address the growth of mandatory spending, which accounts for about 90% of the budget.
The economists discussed fiscal policy at the MBA Brasil event in Chicago.
- Who
- Rodrigo Azevedo of Ibiúna Investimentos and Solange Srour of UBS.
- What
- Economists warned that Brazil may need a sharp fiscal adjustment and discussed risks to debt, inflation and growth.
- When
- At the MBA Brasil event on November 6 and 7, 2026. The reports differ on which day Azevedo made his remarks.
- Where
- Chicago, United States.
- Why
- Azevedo said investors no longer give Brazil the benefit of the doubt on gradual adjustment; Srour cited high interest rates, low growth and rising debt.
Rodrigo Azevedo
Solange Srour
Adjustment strategy
Rodrigo Azevedo
Azevedo said Brazil has lost the chance for gradual adjustment and may need a shock, while warning that it could be disorderly.
Solange Srour
Srour said a small adjustment would not survive political pressure and called for an announced agenda that produces savings over time.
Mandatory spending
Rodrigo Azevedo
Azevedo emphasized the need for fiscal adjustment but did not specify a spending measure in the cited remarks.
Solange Srour
Srour said the growth of mandatory spending must slow, including through changes to indexation, pensions and spending floors for health and education.
Reports that a government faction might back André Lara Resende’s proposals increased investor unease.
MBA Brasil held its conference in Chicago; the reports differ on whether Azevedo’s remarks were made on the 6th or at a panel on the 7th.
Exame reported on a panel featuring Azevedo and Srour on Brazil’s economic challenges and opportunities.
- Event
- MBA Brasil 2026 conference in Chicago
- Azevedo’s institution
- Ibiúna Investimentos
- Srour’s institution
- UBS
- Mandatory spending
- About 90% of the budget
- Public debt
- 83% of GDP, according to figures cited at the panel
2 sources
What people are saying
We lost the chance in Brazil to make gradual adjustments. It will have to be a shock adjustment.
Investors do not give the benefit of the doubt.
To meet social demands, the pace of public spending is much faster under the PT government.
Companies are, in fact, with a rope around their necks.