Brazil’s Congress approved a 2025 budget projecting a primary surplus of 15 billion reais, a notable increase from earlier forecasts. Sponsored by Senator Angelo Coronel, the bill awaits President Lula’s approval and reflects revised revenue expectations, highlighting fiscal challenges facing the administration.
Brazil’s Congress successfully approved a 2025 budget bill which anticipates a primary surplus of 15 billion reais ($2.66 billion) for the central government. This figure marks a significant increase from the previously projected surplus of 3.7 billion reais in August, reflecting upward revisions in revenue forecasts.
Spearheaded by Senator Angelo Coronel, the approved text now awaits President Luiz Inacio Lula da Silva’s signature to become law. Lula initially implemented a new fiscal framework in 2023 that set a primary balance target paired with a spending growth cap of 2.5% above inflation.
For the current year, the target stipulates a zero primary deficit, with an allowance of 0.25% of the gross domestic product, indicating that a deficit of up to 30.9 billion reais would still satisfy the fiscal rule. Senator Coronel conveyed that he integrated modifications requested by the federal government, notably an increase in social security benefits while reducing allocations for the Bolsa Familia welfare program.
Historically, the annual budget bill is finalized before the commencement of the new fiscal year. However, the considerable delay in this year’s process highlights the ongoing challenges faced by Lula’s leftist administration in maintaining a functional relationship with Congress.
The recent approval of Brazil’s 2025 budget bill signifies a robust projection of a primary surplus, altered from previous estimates, reflecting a strategic approach to fiscal management. The execution of this budget hinges on President Lula’s endorsement, amidst ongoing challenges in legislative cohesion. This development emphasizes the complexities within Brazil’s political landscape and fiscal responsibilities of the administration.
Original Source: www.tradingview.com
