Brazil faces a critical fiscal crisis driven by unsustainable pension spending that threatens long-term economic stability.

Brazil faces a critical fiscal crisis driven by unsustainable pension spending that threatens long-term economic stability. Pensions currently consume ten percent of GDP, already matching Japan's level despite Brazil having a younger population similar to Chile and Mexico. Without significant reforms, the social-security deficit will balloon from two percent of GDP today to over sixteen percent by 2060, creating a structural burden that will dwarf spending in many wealthier nations. The judicial system compounds the problem, costing an additional 1.3 percent of GDP, largely due to generous military pensions where soldiers retire before age fifty-five with full salary benefits. The 2019 reform introduced a minimum retirement age but proved insufficient to address the underlying imbalance.