Lula’s minister said that the Mexican country risk would be greater than the Brazilian one, but, in reality, it is lower
The minister (General Secretariat of the Presidency of the Republic) cited incorrect data from Mexico when demanding a reduction in the basic rate, the Selic, in Brazil.
Here is what the minister said: “Brazil has one of the lowest country risks in Latin America and has the highest interest rates in Latin America. Mexico’s country risk is 10 times ours. And our interest rates are 5 times theirs. How can this be justified? We need to start thinking about what the world is thinking. Even the IMF already says that the path is not austerity, and Faria Lima shares the IMF’s speech from the 1990s”.
The statement was made on Monday (3.Nov.2025), during , organized by Esfera Brasil, in Brasília.
The most recent data shows that Mexico has country risk – calculated by the CDS (Credit Default Swap) 5 years – 93.50 points. This level is 47.31 percentage points smaller than the Brazilian (140.81 points).
A higher CDS reflects a greater perception of risk – investors demand more premium to protect themselves. The smaller the CDS, the more reliable and stable the country is in the eyes of the financial market.
Boulos is wrong to say, therefore, that Mexico’s country risk is greater than Brazil’s.
Another mistake was about interest rates in Mexico. “Our interest is 5 times his”said the minister. In reality, the Selic rate is 15% per year, while the Mexican base interest is 7.5%.
When using real interest rates as a comparison, which consider correction for inflation, the Brazilian rate is 9.51%, a. Mexico’s real interest rate is 3.77%, the 5th highest. Therefore, in both nominal and real comparisons, it is not correct to say that there is this difference.
Boulos demanded a reduction in interest rates in Brazil when making the declaration. The Copom (Monetary Policy Committee) met on Wednesday (Nov 5) to define the basic rate. It was 15% per year.
“What does the country gain from 15% interest per year? It is impossible to have a national industry like that. It is impractical”said Boulos. “It is not justified just by market factors. Brazil has one of the lowest risks in Latin America and one of the highest interest rates in Latin America”he completed.
Risk agencies and (Standard & Poor’s) classify Mexico with grades Baa2 and BBB, respectively, which are above the level of Brazil (Ba1 and BB), a level “speculative”.
INTEREST RATE
The Central Bank raised the Selic rate to control inflation, which has been outside the target range for 12 consecutive months, therefore above 4.5%. At the moment . Mexico’s INPC (Consumer Price Index) showed that the country’s inflation was . The inflation target is the same as Brazil, 3.0%.
Data from the IMF (International Monetary Fund) show that Mexico’s gross debt is 58.9% of GDP (Gross Domestic Product), while Brazil’s is 91.4% of GDP. Mexico has investment grade rating from risk agencies Moody’s and S&P, while Brazil’s rating is considered speculative grade.
In 2025, none of the 7 directors appointed by the president (PT) voted to cut the Selic. There were 6 meetings until Wednesday (5.Nov.2025). Financial agents estimate that the basic interest will be maintained at .
O Poder360 He contacted the General Secretariat of the Presidency of the Republic to ask if the minister would like to speak out or explain what he meant when citing the data. There was no response until the publication of this report. The text will be updated if a statement is sent to this digital newspaper.
