Brazil’s Congress Approves 2025 Budget Bill Amid Fiscal Adjustments

Brazil’s Congress approved a budget bill for 2025 projecting a primary surplus of 15 billion reais, a rise from the earlier estimate of 3.7 billion reais. Required presidential approval is pending. This budget reflects changes to accommodate increased social security spending and highlights ongoing challenges in the administration’s congressional relations.

On Thursday, Brazil’s Congress sanctioned the 2025 budget bill, projecting a primary surplus of 15 billion reais ($2.66 billion) for the central government, a significant increase from the previous projection of 3.7 billion reais made in August. The bill’s sponsor, Senator Angelo Coronel, indicated that this improvement stems from higher-than-expected revenue forecasts that enhanced the primary balance outlook.

This budget bill requires the signature of President Luiz Inacio Lula da Silva to become law. In his inaugural year, Lula implemented a new fiscal framework that sets a primary balance target while capping spending growth to a maximum of 2.5% above inflation, aiming for an effective control on governmental expenditures.

The primary deficit target for the current year is zero, allowing for a margin of 0.25% of gross domestic product. This margin permits the government to run a deficit of up to 30.9 billion reais while remaining compliant with fiscal regulations. Senator Coronel mentioned that he included adjustments sought by the federal government, which entail elevated social security spending and a reduction in Bolsa Familia welfare program costs that provide monthly financial assistance.

Usually, Brazil’s annual budget is approved before the preceding year concludes. The delay in passing this year’s budget highlights the difficulties faced by President Lula’s leftist administration in navigating relationships within Congress.

Brazil’s Congress has approved a budget bill for 2025, which anticipates a primary surplus of 15 billion reais, reflecting revised revenue projections. The bill will need the President’s approval to be enacted. This development illustrates the administration’s ongoing challenges in achieving compliance with budgetary targets while addressing social spending and maintaining fiscal discipline.

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