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2h ago

Brazil Cuts 2025 Budget Freeze to R$7.7 Billion as Deficit Outlook Worsens

The revision follows a higher deficit projection driven by state‑owned companies, chiefly Correios.

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Overview

  • The 5th bimonthly revenue‑and‑spending report set total constrained resources at R$7.7 billion, composed of R$4.4 billion in blocks and R$3.3 billion in contingencies.
  • The projected 2025 primary deficit was raised to R$34.3 billion from R$30.2 billion after the government compensated a larger shortfall at federal state‑owned firms and marked down some revenues.
  • Exceeding the fiscal band’s R$31 billion floor triggered the year’s first contingenciamento to safeguard the target under the new fiscal framework.
  • To cover higher mandatory outlays, R$3.8 billion of prior blocks were canceled, reducing the effective freeze from R$8.3 billion to R$7.7 billion for a relative release of R$644 million.
  • Ministry‑by‑ministry allocations will be defined in the Nov. 30 budget decree, and a TCU rapporteur authorized aiming at the band’s floor for contingencies in 2025 pending plenary review.