The year 2025 was one of political upheavals in Brazil. The end of the government was even declared in the first few months; with oea, in the middle of the year. We reached the end of the year in a more ambiguous scenario.
On the one hand, the announcement of his candidacy and the probable withdrawal of the governor of São Paulo from the presidential race in 2026 were seen as a good omen for Lula. On the other hand, the approval of the 2026 Budget, with the obligation to execute a large part of the amendments in the first half of the year, and the confirmation that the overturning of presidential vetoes reached historic levels paint a scenario of greater difficulty for the president in the last year of government.
The year began without the approval of the Annual Budget Law, limiting Executive spending and with much attention devoted to parliamentary amendments to the budget. The absence of the leadership of Congress and the Judiciary in the act of January 8 was symbolic. In February, he was elected president of the Chamber with the support of the government and the opposition, even without being the first option of . At the same time, Lula’s approval rating reached its lowest level.
March was marked by the late approval of the budget, changes in the government’s political articulation and the license to operate in the United States. In April, the refusal of Pedro Lucas (União Brasil) to assume a ministry cast doubt on the Executive’s power of attraction, while complaints at the INSS brought down its leadership.
In May, the Executive decree was published that raised the IOF rate, overturned by the Chamber in June, when the increase in the number of deputies was also approved. In July, Bolsonaro started using an electronic ankle bracelet, and the Chamber’s decision on the IOF decree was reversed. In the same period, Lula regained popularity and indicated that he would veto the increase in the number of deputies.
The second half of the year was dominated by the judicial escalation against Jair Bolsonaro, the generals and other accomplices in the coup attempt, culminating in convictions in the STF and, later, in the former president’s house arrest and return to the closed regime. At the same time, Congress advanced sensitive issues, such as the Armor PEC and changes in environmental licensing, while high-impact police operations put public safety back at the center of the debate.
Lula also had victories, such as the approval of the Income Tax exemption for those who receive up to R$5,000 per month and the success in negotiating with Trump to reverse the tariffs imposed on the country.
The year ends with new institutional wear and tear in the STF, especially around Banco Master, and with the approval of a budget that further reduces the space for discretionary investments by the Executive. The announcement of Flávio as his father’s political heir strains the Bolsonaro family’s relationship with the center and complicates the São Paulo governor’s plans.
The year ends by highlighting the fragility of the president of the Chamber, the cowardice of the coup plotters trying to flee the country and reserving a summer of intense political articulations for the definition of national and state candidacies, both from the government and the opposition.
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