Brazil Runoff Turns on Lula’s Deficit Record

National Treasury data show deficits in every year from 2023 through 2025, complicating President Lula’s claim about his record on primary surpluses as Brazil heads toward its 25 October presidential runoff. Lula and Senator Flávio Bolsonaro faced off in a tense Band television debate on Sunday night, 18 October. Their competing accounts of the public finances drew scrutiny.

What the Treasury data show

At 10:33 p.m. Brasília time on 18 October, Revista Fórum reported that Lula had said he was the only president to record primary surpluses for eight consecutive years. Fórum said he repeated the point during the debate and had made the same argument in a Globo interview on 15 October. No second outlet carrying the remark turned up, and Agência Lupa’s live fact-check of the debate didn’t include it among the statements it checked.

The Treasury’s historical series, updated to July 2026, records central-government primary surpluses every year from 2003 through 2010. The annual above-the-line results ranged from R$39.1 billion, about US$7.7 billion, in 2003 to R$77.9 billion, about US$15.3 billion, in 2010. A second measure, calculated below the line from changes in net debt using central bank data, also shows surpluses in each of those years.

Fórum put the surpluses at roughly 2.5% to 3.0% of GDP. That range doesn’t match the central-government series, and the outlet’s article doesn’t say which measure it used. In the Treasury series, the weakest result as a share of output came in 2009, when the global financial crisis cut the surplus to 1.2% of GDP. The strongest was 2.5% in 2004. On average, the results were about 2.1% of GDP above the line and about 2.2% below it.

The historical record also puts Lula’s eight-year run within a longer stretch of surpluses. The Treasury file shows surpluses on both measures from 1998 to 2013. That run began under Fernando Henrique Cardoso, Lula’s predecessor, and ended in 2014 with a R$23.5 billion deficit during Dilma Rousseff’s first term. Since the file begins in 1997, it doesn’t cover Cardoso’s first two years in office. A primary balance measures revenue minus spending before interest on public debt. It doesn’t show whether the overall budget was in the black.

The current-term record and campaign claims

The Treasury records a central-government deficit of R$228.5 billion, about US$45.0 billion, in 2023, equal to 2.1% of GDP. Agência Lupa noted that the government paid R$92.4 billion, about US$18.2 billion, in court-ordered debts known as precatórios that December. Deficits continued in 2024, at R$42.9 billion, and in 2025, at R$61.7 billion—equivalent to 0.4% and 0.5% of GDP. Lupa cited a different 2024 figure, R$47.6 billion; the sources don’t explain the discrepancy.

At the debate, Lula said Brazil was presenting a budget with a 0.1% surplus. Lupa rated the claim true for the R$18.6 billion projected in the 2027 budget bill, but said it was a projection, not a result. Earlier targets of balance for 2024 and 2025 ended in deficits. Lupa rated Lula’s statement that the previous government left a 2.8% deficit false: the 2022 central-government result was a surplus. Lupa put it at R$54.1 billion, while the Treasury’s above-the-line figure was R$46.4 billion. Lupa said delayed precatório payments under Jair Bolsonaro, Flávio Bolsonaro’s father, helped produce that surplus.

Fórum also said Lula’s third term had set records in 43 economic and social indicators. Its examples included unemployment of 5.1% in December 2025, a 2025/26 grain-harvest forecast of 361.7 million tonnes, oil output of 4.6 million barrels a day in August 2026, and a wage bill of R$332.7 billion. Those figures weren’t independently checked in the reporting. Agência Brasil confirmed a September trade surplus of US$7.74 billion, based on a trade ministry release on 6 October, and called it the second-best September result, behind US$9.18 billion in 2023.

Market odds are not votes

Prediction-market prices published ahead of the runoff showed Flávio Bolsonaro ahead of Lula, but they reflected bets, not polls or forecasts of the result. One Polymarket account at 12:59 a.m. ET on 19 October gave Flávio 78.7% and Lula 21.5%, with about US$187.8 million traded in the Brazil Presidential Election event. Later displays showed Flávio at 79% and Lula at 22% on Polymarket, and Flávio at 79% and Lula at 21% on Kalshi, as of 7 a.m. ET. No official full-year 2026 result was available. Whether the projected 2027 surplus will be achieved remains open.