Brazil enters the second half of 2025 with brisk international activism and some genuine social gains, yet still wrestles with high inflation, expensive credit and bitter political fault-lines at home.
Some numbers:
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Growth: The economy expanded 3.4 % in 2024 and, after a surprisingly strong first quarter, the Finance Ministry now projects 2.4 % growth for 2025 (private banks cluster nearer 2.2 %). agenciadenoticias.ibge.gov.brreuters.comitau.com.br
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Inflation & rates: Annual CPI is stuck above target at ≈ 5.2 %, so the Central Bank has frozen the Selic at 14.75 % (May-25) after six consecutive hikes, signalling no relief before 2026. reuters.comtradingeconomics.com
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Currency: Last year’s 27 % slump pushed the real past R$ 6/US$, but partial confidence-building and slightly firmer commodity prices have clawed back ~2 % in 2025. tradingeconomics.com
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Debt & spending: Gross debt stands at 78.6 % of GDP, while November 2024’s R$ 70 bn (US$ 11.8 bn) belt-tightening has not yet delivered a clear primary-surplus path. en.mercopress.com
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Green pivot vs. oil push: Lula’s Ecological Transformation Plan (zero illegal deforestation by 2030, green-jobs finance) squares uneasily with Petrobras’ R$ 110 bn 2025-29 upstream drive, including controversial Amazon-margin drilling, now inching through Ibama. reuters.com
Growth is still respectable for a high-rate environment and the fiscal story is no worse than peers but the inflation-rate mix leaves little room to stimulate.
On 19 Feb 2025 the Supreme Court formally indicted former president Jair Bolsonaro and 33 aides for an alleged coup plot and assassination plan to stop Lula’s 2023 inauguration. reuters.com The Court has now convicted 643 people for the 8 Jan 2023 storming of Brasília’s federal plaza—more than double the tally a year ago. en.mercopress.com Bolsonaro remains barred from elected office until 2030; the right wing is testing successor figures such as Goiás governor Ronaldo Caiado and Paraná’s Ratinho Júnior. A Supreme-Court verdict in the coup trial—expected late-2025—will shape conservative strategy for 2026.
2024 municipal elections confirmed the strength of the centrist-right Centrão while the Workers’ Party (PT) retained only ten large cities. Political violence kept rising, with 558 documented attacks on candidates and campaign workers. Lula will be 81 by election day 2026 and has undergone two surgeries since 2023; PT lacks a breakout successor, whereas the right can rally around several governors even if Bolsonaro is legally sidelined. Lula’s coalition eyes Senate gains in 2026 to counter a right-leaning lower-house majority that often amends or stalls executive bills.
| However: | |
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| Hunger & poverty | Government programmes (Bolsa Família, cheaper staples) pulled 24.4 m people out of severe food insecurity by end-2024; independent research confirms at least 13 m in 2023 alone. gov.brglobalallianceagainsthungerandpoverty.org |
| Police violence | 4,565 police killings recorded to Sept 2024; >80 % of victims were Black. Reforms to curb lethal raids remain patchy. hrw.org |
| Amazon | INPE data show deforestation down ~50 % in 2023-24 vs. the previous year, though fires spiked in the Cerrado. en.wikipedia.org |
Brazil steered a consensus on the Global Alliance Against Hunger and Poverty, now signed by 88 states, and pressed for IMF & WTO reform—rare wins for the Global South. en.wikipedia.org With an expanded BRICS (now 11 members), Brasília is marketing a “green development bank” idea and brokering common positions on artificial-intelligence governance and climate finance—though U.S. threats of 10 % tariffs on BRICS exports show how contested this space is. reuters.com
The choice of an Amazonian city (COP 30 host (Belém, Nov 2025) underscores Lula’s pledge of zero illegal deforestation by 2030 and positions Brazil as a climate convenor. en.wikipedia.org
Brazil’s credible anti-hunger narrative, falling Amazon tree-loss, and vaccines-for-all foreign policy have revived much of the soft power eroded in the previous decade. But … high borrowing costs and a still-sticky inflation rate dilute the sheen. Questions linger over Petrobras’ deep-sea ambitions and the integrity of voluntary carbon markets, highlighted by recent exposés of “greenwashed” Amazon projects. reuters.com
Brazil is unmistakably “back” on the world stage—hosting, mediating and norm-setting—while delivering real (if incomplete) progress on forests and food security. The country’s credibility will ultimately hinge on translating these summit pledges into sustained fiscal discipline at home, lower inequality, and an unmistakable drop in violent crime.
Brazil’s 2025 story is one of measured optimism: growth is slowing but still outpacing many peers; deforestation and hunger are retreating; and Brasília is once again a central voice in global governance. Yet inflation, a heavy interest-rate anchor and deep partisan rifts remain stubborn challenges. Whether Lula’s coalition or an emerging right-wing successor bloc can convince voters in 2026 will depend on keeping the macro fundamentals steady—and on proving that the new era of global visibility delivers concrete benefits on Brazilian streets.
