We’ve seen this Marxist story before under the leadership of Luiz Inácio Lula da Silva. Lula’s socialist policies continue to flirt with full-blown communism, and—just like in the past—scandal and instability often follow when the numbers no longer add up.
Lula’s economic model relies heavily on public sector job creation, but such growth is rarely sustainable. When inflation begins to accelerate, as it now appears to be doing, socialist governments tend to downplay or manipulate the data rather than confront the underlying issues.
The latest figures do not look promising—especially for Brazil’s private sector, which bears the real weight of the nation’s productivity.
Public vs. Private Sector Reality
It’s important to remember that the public sector does not generate real taxable revenue. While government workers may pay income and consumer taxes, their wages ultimately come from taxpayers themselves. True economic strength comes from private enterprise, where goods and services are produced, traded, and sold in both domestic and international markets based on price discovery, not price controls.
For example, if I run a private company selling corned beef, I must balance the books and ensure my business remains profitable today—not in theory, but in real time. The government, on the other hand, does not operate on profit; it operates on political ideology. Under Lula’s administration, this means public servants’ wages can continue to rise with inflation even when tax revenue and productivity are in decline.
This is not sustainable.
Brazil’s Currency and Inflation Risks
Unlike the United States, Brazil does not issue the world’s reserve currency, meaning it cannot print its way out of fiscal problems. The foreign exchange markets will not rescue Brazil once investors realize that the government is running negative cash flow.
The central bank, bond markets, and tax collectors will soon face mounting pressure as the Lula administration’s policies—focused more on social justice than fiscal discipline—continue to fuel inflation.
As always, the wealthy and politically connected will likely protect themselves by holding foreign currencies or inflation-hedged assets. Meanwhile, ordinary Brazilians paid in Brazilian reals (BRL) could face significant hardship as purchasing power erodes. And when socialists run out of other people’s money to spend, they tend to “invent” new policies that further restrict private property and free enterprise.
Private Sector Weakness and Economic Data
Recent data confirms growing weakness in Brazil’s private sector. After a strong 2023 and early 2024, conditions worsened in mid-to-late 2025:
- Composite PMI: The S&P Global Composite PMI for Brazil fell to 46.0 in September 2025—indicating the fastest contraction in nearly four and a half years. (A reading below 50 signals contraction.)
- Manufacturing and Services: Both manufacturing (46.5) and services (46.3) sectors declined in September 2025.
- New Orders: New and factory orders are decreasing, reflecting broad-based weakness in domestic demand.
- Private Investment: Investment remains subdued due to high interest rates and uncertainty.
- Stock Market Activity: Many companies are leaving Brazil’s B3 stock exchange in “take-private” deals, citing high borrowing costs and political instability.
This contraction follows a 3.4% GDP growth in 2024—driven by private consumption and record agricultural output—but 2025 projections suggest a slowdown to roughly 2.0–2.4% as tighter credit and fiscal pressures weigh on investment.
Employment and Inflation Dynamics
Brazil’s unemployment rate is at a record low of 5.6% as of September 2025—a figure not seen since data tracking began in 2012. On paper, that sounds like a success. In reality, much of this job growth has come from public sector expansion, not private enterprise.
Key Employment Details
- Current Rate: 5.6% (unchanged from August to September 2025).
- Record Low: The lowest since the Brazilian Institute of Geography and Statistics (IBGE) began tracking data in 2012.
- Public Sector Hiring: Over 323,000 new jobs were created in public administration, defense, education, and healthcare in August 2025 alone.
- Other Sectors: Job growth also occurred in agriculture and construction, though trade and domestic services saw declines.
- Labor Force Data: Total employment stands at 102.4 million, with 6.0 million unemployed, and an underutilization rate of 13.9%, the lowest on record.
While these figures appear positive, rising wages and tight labor conditions are adding fuel to inflationary pressure, forcing Brazil’s Central Bank to maintain high interest rates to prevent overheating.
Faith and Financial Caution
To my fellow Christians in Brazil: be watchful. The data I’ve reviewed points toward a potential economic crisis on the horizon.
When governments like Lula’s run out of sustainable funding sources, they often turn to property restrictions, capital controls, or currency interventions that erode personal financial freedom.
If you are in Brazil, consider diversifying your assets—whether that means:
- Holding stable foreign currencies,
- Investing in inflation-resistant assets like gold, or
- Studying the historical behavior of past socialist administrations to anticipate their next move.
Prepare wisely, act prudently, and most importantly—put your faith in Christ first. Governments rise and fall, but God’s truth remains constant.
Closing Message
Consider making Jesus Christ your Lord and Savior today.
The only true stability comes not from political systems or economic structures, but from a relationship with Him.