Brazil’s budget bill for 2025 anticipates a primary surplus of 15 billion reais, increased from 3.7 billion. The revision is due to improved revenue projections. President Lula’s fiscal framework aims for a zero primary deficit, allowing for limited spending growth. The budget process has faced delays, stressing the administration’s challenges with Congress.
Brazil’s budget proposal for 2025 indicates a primary surplus of 15 billion reais ($2.66 billion) for the central government, a substantial increase from the initial projection of 3.7 billion reais. This revision, presented by Senator Angelo Coronel, is set to be voted on by a joint budget committee before advancing to a full congressional session. The upward revision in revenue projections has positively influenced the primary balance forecast.
In 2023, President Luiz Inacio Lula da Silva enacted a new fiscal framework aimed at establishing a primary balance target, coupled with a spending growth cap of 2.5% above inflation. For the current year, the target is a zero primary deficit, allowing for a margin of 0.25% of gross domestic product (GDP), equating to a permissible deficit of up to 30.9 billion reais without breaching established rules.
Senator Coronel acknowledged adjustments made at the request of the federal government, which include increased spending on social security benefits while concurrently reducing allocations for the Bolsa Familia welfare program, which offers monthly cash transfers. Despite the historical precedent of approving the annual budget bill before the end of the previous year, delays this time highlight the difficulties encountered by Lula’s administration in navigating its relationship with Congress.
The revised budget proposal for Brazil’s 2025 fiscal year reflects a significant primary surplus, indicating a positive adjustment in revenue expectations. The new fiscal framework tailored by the current administration aims to balance social spending with fiscal responsibility amid ongoing challenges in legislative relations. This proposal emphasizes the complexities of governance faced by President Lula’s administration as it strives to advance its economic agenda through Congress.
Original Source: money.usnews.com
