Brazil’s budget bill anticipates a 15 billion reais primary surplus for 2025, an adjustment from 3.7 billion. This revision stems from improved revenue projections and is part of a new fiscal framework enacted by President Lula. The changes also highlight challenges faced by his administration in Congress.
Brazil’s 2025 budget bill now anticipates a primary surplus of 15 billion reais ($2.66 billion), a significant increase from the initial 3.7 billion reais proposed by the government. This update was revealed in a version presented by Senator Angelo Coronel and is scheduled for a vote in a joint budget committee, followed by a session in the full Congress.
The revised projections indicate improved revenue forecasts, which have consequently enhanced the primary balance outlook. In 2023, President Luiz Inacio Lula da Silva enacted a new fiscal framework to establish a primary balance target and a spending growth cap, limiting it to a maximum increase of 2.5% above inflation.
This fiscal target is set at zero primary deficit, with a tolerance margin of 0.25% of GDP, allowing for a deficit of up to 30.9 billion reais while still adhering to fiscal rules. Changes made by the senator were based on requests from the federal government, increasing allocations for social security benefits while decreasing expenditures on the Bolsa Familia welfare program.
Typically, the annual budget bill is ratified before the conclusion of the preceding year. However, the delay in this year’s budget highlights the complexities faced by President Lula’s leftist administration in navigating its relationship with Congress.
The revisions to Brazil’s 2025 budget bill reflect an optimistic forecast for a primary surplus, which contrasts sharply with prior projections. The adjustments, driven by improved revenue estimates and government requests, signify an evolving fiscal policy amid challenges in Congress. Ultimately, the successful passage of the budget will be critical for the administration’s ability to meet its financial targets and social commitments.
Original Source: money.usnews.com
