Brazil faces critical fiscal consolidation post-election amid high debt and rigid spending

Brazil faces significant fiscal consolidation challenges, characterized by a high budget deficit and public debt, with over 90% of expenditures mandated by law. While subnational fiscal architecture has strengthened and future tax reform projects a reduced burden by 2027-2028, the immediate policy flexibility is limited. Concurrently, the OECD has lowered global minimum corporate tax revenue projections, signaling potential fiscal headwinds for participating jurisdictions, though the direct impact on Brazil's specific fiscal outlook remains uncertain.