Lula’s Debt Relief Program Struggles to Boost Consumption

President Luiz Inacio Lula da Silva’s plan to help Brazilians escape the record amounts of debt they amassed during the pandemic remains well short of its targets as it approaches its March 31 expiration, denting his efforts to unleash consumer spending and boost growth in Latin America’s largest economy.

Desenrola, as the program is known, was expected to help as many as 70 million people, including 30 million with lower incomes and smaller debts. The Finance Ministry estimated it would renegotiate 50 billion reais ($10.1 billion) in bank-held debts by the end of last year. By the start of March, however, 12 million people had negotiated 36.5 billion reais in debt, according to government figures, even after the program received a three-month extension in December.