Brazil’s Congress has passed the 2025 budget bill, which anticipates a primary surplus of 15 billion reais. The increase from previous forecasts is attributed to revised revenue projections. President Lula must sign the bill for it to take effect. This budget aligns with established fiscal targets and includes changes to social security and welfare funding.
Brazil’s Congress has approved the 2025 budget bill, forecasting a primary surplus of 15 billion reais (approximately $2.66 billion) for the central government, a significant increase from the previous projection of 3.7 billion reais made in August. This increase stems from upward revisions to revenue projections, enhancing the anticipated balance. The bill awaits signature from President Luiz Inácio Lula da Silva to become law.
President Lula’s fiscal framework, introduced in 2023, imposes a target for primary balance alongside a spending cap of up to 2.5% above inflation. For the current year, the government aims for a zero primary deficit, allowing a margin of 0.25% of GDP, equating to a permissible deficit of 30.9 billion reais.
Senator Angelo Coronel has noted that he integrated amendments suggested by the federal government, which include increased allocations for social security benefits and cuts in the Bolsa Família welfare program, known for its monthly cash transfers. The annual budget bill is typically ratified before the year’s end but faced delays this year, indicating the difficulties encountered by Lula’s administration in navigating congressional relations.
The Brazilian Congress’s passage of the 2025 budget bill marks a pivotal adjustment, projecting a higher primary surplus and outlining fiscal measures through Senator Coronel’s revisions. Notably, President Lula’s fiscal discipline aims to balance the budget, reflecting a strategy to manage social expenditures amid legislative challenges. This approval, though late, signifies ongoing efforts to stabilize the economy amidst shifting governmental priorities.
Original Source: www.tradingview.com
