From Hyperinflation to Political Polarization: Brazil’s Economy and Presidential Elections in 2026

Fernando Haddad, the Brazilian Finance Minister, has been rumored as a potential candidate for the Presidency of the country in the 2026 elections. The recent discussion gained strength with the upcoming 30th anniversary of the Real Plan on July 1, 1994, which ended high inflation and changed Brazilian history. Young people today may not fully comprehend the impact of past inflation as prices used to rise multiple times a day during the hyperinflation era of the 1980s.

During this time, it was challenging to obtain credit, salaries quickly lost their value, and exorbitant interest rates made managing finances difficult. The stabilization of the economy brought about significant changes, attracting investments and offering stability for long-term planning. Since then, the official inflation target has been set at 3% per year with a tolerance of 1.5% more or less.

Former Finance Minister Fernando Henrique Cardoso played a crucial role in implementing the Real Plan with President Itamar Franco’s government and other key stakeholders. The plan was successful due to various measures taken such as introducing a new currency, fiscal and monetary reforms, and ending ineffective policies like price freezes and savings confiscation.

Despite their political differences, Cardoso and former President Luiz Inácio Lula da Silva have contributed significantly to shaping Brazilian politics and the economy. The ongoing polarization in the country continues with Lula being critical of current President Jair Bolsonaro’s government while Bolsonaro accuses Lula’s Workers’ Party of corruption and economic mismanagement.

Looking ahead to the 2026 presidential election, Fernando Haddad has indicated that he does not plan to run for office again at least for now. The current political landscape in Brazil is characterized by polarization between different parties and ideologies with centrist parties facing challenges in gaining traction.

As Brazil navigates through economic fluctuations and political tensions, it is important to remember that progress made since implementing the Real Plan serves as a reminder of stability’s importance in shaping nations’ future.