Brazil Posts R$53.3 Billion Primary Deficit in May

Overview

• The Tesouro Nacional report released Monday, June 29, showed a government central primary deficit of R$53.257–53.3 billion for May 2026 with May receipts of R$198 billion and expenditures of R$251.2 billion.
• Spending rose 9.4% in real terms year‑on‑year in May while revenues rose 5.5%, with the biggest pressures coming from higher discretionary outlays, increased previdenciary benefits and a R$60.7 billion deficit in the general social security regime (RGPS).
• January–May moved from a surplus in 2025 to a R$44.4 billion deficit in 2026 and the 12‑month accumulated primary shortfall reached R$142.3 billion, equal to about 1.06% of GDP.
• The government expanded a discretionary budget block to R$23.7 billion and the Treasury now projects a roughly R$60.3 billion year‑end deficit while saying expenses as a share of GDP should fall toward 19% in the second half.
• The timing of precató rios payments and accelerated execution of mandatory emendas in the election year explain part of the spike but the swing increases the risk of missing the official fiscal target and could force congressional moves to authorize financing for routine spending.