BTG Pactual Chairman André Esteves Calls for Brazil's Fiscal Adjustment and Lower Interest Rates In a detailed speech, BTG Pactual's chairman André Esteves argues that Brazil's fiscal challenges are political rather than ideological, urging a balanced approach to spending and revenue reforms that could slash the benchmark interest rate from 14% to 7%. He also warns that institutional decay could derail the country's economic prospects. Esteves, who owns and issues tax‑exempt securities, says their volume is absurd and calls for a comprehensive tax reform. The discussion touches on the current presidential race, data that the necessary measures are nonpartisan, and the importance of congressional approval. The speech could have significant implications for investors, policymakers, and the future of Brazil's economic policy. In a recent speech delivered at a financial conference, BTG Pactual's chairman André Esteves made a series of provocative remarks about the future of Brazil's fiscal policy and the country's interest rate trajectory. According to Esteves, the fiscal adjustment that Brazil needs is not a political dilemma but a technical necessity that can be accomplished with a few, well‑chosen measures that are independent of the current political environment. He frames the issue as a matter of fiscal credibility and balances his recommendations between the spending side and the revenue side of the budget.The chairman emphasizes that Brazil's public spending has already grown too much, and that a meaningful adjustment must come from both expansionary spending cuts and revenue improvements. Esteves is particularly blunt about Brazil's tax‑exempt securities. As both a holder and an issuer of these instruments, he points out that the volume of tax‑exempt securities in the country is completely absurd and distorts the revenue base.He says that this issue is not an incentive for investors but a distortion of the fiscal system that should be corrected. The chairman concludes that a reduction in the benchmark interest rate, base rate, from its current 14% to roughly 7% is both possible and essential for Brazil's economic growth.He argues that the high rate suffocates private investment, and that a lower rate would lead to a higher value for society than any social program or marginal increase in investment. Esteves also emphasizes that while the fiscal battle is easier to win, the institutional battle can't be lost. He warns that a regulated portion of the economy has become 20% informal and that small, unregistered companies are creating losses that amount to tens of billions of reais.The chairman's warning - that if Brazil fails to defend its institutions it will end up somewhere between Mexico and Russia - signals that investors and policymakers need to look beyond short‑term spending cuts and focus on institutional strengthening and governance. The independent, technical arguments presented by the chairman suggest that the political dynamics of the upcoming presidential election are unlikely to affect the trajectory of fiscal policy.Instead, the focus should now be on determining whether Congress can approve the necessary spending‑efficiency and tax reforms and whether the electoral outcome will ensure the national interest's priorities are maintained. Overall, Esteves' speech highlights a future for Brazil in which fiscal discipline, growth‑favorable rates, and a strong institutional framework will create the conditions for a stronger economy.For financial markets, this commentary could be the beginning of a more euros‑style approach to Brazil, meaning that investors may expect a shift in the country's policy and a potential new wave of fiscal reform.