Brazil’s Congress approved a 2025 budget bill, projecting a primary surplus of 15 billion reais, up from earlier forecasts. Sponsored by Senator Angelo Coronel, the bill reflects revised revenue expectations. President Lula’s fiscal framework allows for a controlled primary balance, with adjustments in social programs featured within the budget. The delay in the approval process points to the administration’s ongoing challenges with Congress.
On Thursday, Brazil’s Congress passed the 2025 budget bill, projecting a primary surplus of 15 billion reais (approximately $2.66 billion) for the central government. This figure is a notable increase from the 3.7 billion reais forecasted in August. Senator Angelo Coronel, who sponsored the bill, indicated that revised revenue projections contributed to this more favorable primary balance. The bill requires the signature of President Luiz Inacio Lula da Silva to become law.
In his first year in office, President Lula enacted a new fiscal framework that establishes a primary balance target alongside a spending cap of 2.5% growth above inflation. This year, the primary deficit target stands at zero, with a permissible margin of 0.25% of gross domestic product (GDP), allowing a potential deficit of up to 30.9 billion reais.
Senator Coronel mentioned that he had incorporated requests from the federal government into the budget, such as increasing social security benefits and decreasing spending on the Bolsa Familia welfare program, which allocates monthly cash transfers to families in need. Typically, the budget bill is approved before the end of the preceding year; however, this year’s delay highlights the difficulties encountered by Lula’s leftist administration in its negotiations with Congress.
The approval of Brazil’s 2025 budget bill, which projects a primary surplus significantly higher than prior estimates, underscores the government’s revised revenue expectations and its fiscal planning efforts. Despite challenges, such as delays in approval and adjustments in program funding, the administration continues to navigate its fiscal policies under President Lula’s new framework. Ultimately, the bill’s success depends on the President’s endorsement of the Congressional decision.
Original Source: www.tradingview.com
