Due to Lula, a stagnation and increase in inflation in Brazil is projected for 2027

The Itaú bank has significantly downgraded its growth outlook for Brazil in 2027 and anticipates inflation considerably above the official target, in a scenario marked by imbalances in public accounts due to the disastrous economic policy of the Lula da Silva regime.

The entity reduced its forecast for Brazilian Gross Domestic Product (GDP) growth for 2027 from 1.2% to 0.5%, practically a stagnation of activity.

At the same time, it raised its forecast for the Broad National Consumer Price Index (IPCA), which increased from 4.6% to 6.1%.

The revision represents a significant deterioration in the country's economic outlook and exposes the crisis facing Lula's administration due to its socialist policies. The increase in public spending and the high fiscal deficit are the reasons for this downgrade and the poor performance of the Brazilian economy.

Itaú's inflation forecast also diverges considerably from the targets set by monetary authorities.

The outlook for 2026 has also been adjusted. Itaú reduced its GDP growth estimate from 1.7% to 1.6% and raised the inflation projection from 5.1% to 5.2%.

A record fiscal deficit

This outlook is compounded by the situation of public accounts. The bank projects that Brazil will register a primary deficit equivalent to 0.6% of GDP in 2027, about 16.1 billion dollars. Furthermore, data from the Central Bank of Brazil shows that the accumulated deficit over the last twelve months reached 9.51% of GDP as of September 2026.

The fiscal imbalance constitutes one of the main challenges for the Brazilian economy. In this regard, Milton Maluhy Filho, CEO of Banco Itaú, warned that fiscal issues will be the greatest challenge for the country's economic management.

The new estimates from Brazil's largest private bank reflect the serious scenario generated by Lula's administration, with lower growth, inflation above the target, and highly deficit public accounts.