Economist Juliana Inhasz said that debt renegotiation and the use of severance funds do not solve Brazil's underlying income problems.

These findings highlight a systemic failure in current financial relief strategies. While temporary measures provide immediate liquidity, they fail to address the structural economic barriers that keep families in a cycle of poverty and debt.

Inhasz said that Brazilian family indebtedness reached a record level in April 2026 [1]. She said that measures such as the use of the FGTS, the government-managed severance fund, to pay off debts do not resolve the core issue [2]. According to Inhasz, forcing defaulters back into the credit market without increasing their income simply restarts the cycle of indebtedness.

Low productivity and the high "Custo Brasil" — the set of structural costs that make doing business in the country more expensive — remain the primary drivers of this crisis. Inhasz said that focusing on these structural bottlenecks is the only way to create sustainable income growth.

Regarding the impact of sports betting, Inhasz said that barriers like prohibiting such bets have a limited effect. She said that individuals use third-party tax identification numbers to place bets, bypassing restrictions and further complicating the financial stability of vulnerable populations.

To break the cycle, Inhasz said that the government must prioritize productivity gains over punctual debt relief. Without a fundamental shift in how the economy generates wealth, temporary interventions will continue to provide only fleeting relief for the population.

“Debt renegotiation and the use of severance funds do not solve Brazil's underlying income problems.”

The persistence of record-high household debt in Brazil suggests that monetary interventions, such as the 'Desenrola' programs or FGTS withdrawals, act as temporary bandages rather than cures. By treating the symptom (debt) rather than the cause (low productivity and high operational costs), the state risks creating a revolving door of credit and default that prevents long-term capital accumulation for the working class.