Brazil’s 2025 budget bill now anticipates a primary surplus of 15 billion reais, up from 3.7 billion. The revision comes as revenue forecasts improve. President Lula’s new fiscal framework aims for a zero primary deficit. Changes were made to balance social security benefits and welfare expenditures. The delay in approval reflects challenges in Congress relations.
Brazil’s budget bill for the year 2025 has been revised to reflect a primary surplus of 15 billion reais ($2.66 billion) for the central government, an increase from the initial proposal of 3.7 billion reais. Senator Angelo Coronel introduced this updated version, which is scheduled for a vote within a joint budget committee before being presented to the full Congress. The revision arose from improved revenue projections, leading to a more favorable outlook for the primary balance.
This fiscal year, President Luiz Inacio Lula da Silva implemented a new fiscal framework, emphasizing a primary balance target alongside a spending cap of 2.5% above inflation. The target for the current year stipulates a zero primary deficit, with an allowance of a 0.25% margin of the gross domestic product (GDP), equating to a possible deficit of up to 30.9 billion reais while remaining compliant with fiscal regulations.
Senator Coronel acknowledged that he integrated changes suggested by the federal government, which included an increase in expenditures for social security benefits while reducing allocations for the Bolsa Familia welfare program, which provides cash assistance to eligible individuals. The traditional timeline for the budget bill’s approval before the end of the previous year was significantly delayed, illustrating the difficulties encountered by President Lula’s leftist government in maintaining a cooperative relationship with Congress.
In summary, Brazil’s 2025 budget bill has been revised to project a primary surplus of 15 billion reais, indicating improved fiscal health compared to previous estimates. Key factors influencing this adjustment include the revised revenue forecasts and strategic allocations between social security and welfare programs. The challenges faced by the current administration in legislative negotiations highlight ongoing complexities in the governance of Brazil’s fiscal policies.
Original Source: money.usnews.com
