Brazil’s 2025 Budget Bill Sees Increased Surplus Following Congressional Revision

Brazil’s 2025 budget bill proposes a primary surplus of 15 billion reais, an increase from the original 3.7 billion. The adjustments reflect improved revenue forecasts amid new fiscal policies set by President Lula. Changes include enhanced social security funding and reductions in welfare program expenditures. Legislative delays indicate the challenges posed to Lula’s administration in Congress.

Brazil’s budget bill for 2025 anticipates a primary surplus of 15 billion reais, approximately $2.66 billion, reflecting an increase from the 3.7 billion reais initially proposed by the government. This revision was presented by Senator Angelo Coronel and is scheduled for a vote in Congress shortly. The enhancements in revenue projections are attributed to adjustments in economic outlook, resulting in a more favorable primary balance forecast.

In his first year in office, President Luiz Inacio Lula da Silva established a new fiscal framework, which aims for a primary balance target while capping spending growth at 2.5% above inflation. For the current year, the target is to achieve a zero primary deficit, allowing a permissible deficit of 30.9 billion reais, which equates to 0.25% of the country’s GDP.

Senator Coronel reported that the budget revisions reflect changes necessary to address federal government requests. These adjustments include an increase in funding for social security benefits while simultaneously reducing allocations for the Bolsa Familia welfare program, which is designed to offer monthly cash transfers to its beneficiaries.

The annual budget bill typically receives approval before the close of the previous year; however, this year’s delays highlight the complexities within President Lula’s leftist administration as it navigates its legislative relations with Congress.

The revised 2025 budget bill for Brazil proposes a primary surplus of 15 billion reais, significantly higher than prior estimates. This adjustment is attributed to increased revenue forecasts and reflects the administration’s fiscal strategies aimed at maintaining economic stability. Challenges in legislative negotiations further emphasized the complexities within President Lula’s governance as he seeks to balance social expenditures with fiscal discipline.

Original Source: money.usnews.com