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

Overview

• The total restraint reaches R$7.7 billion, split between R$4.4 billion in harder-to-reverse spending blocks and R$3.3 billion in contingent holds.
• The government raised its 2025 primary deficit projection to R$34.3 billion from R$30.2 billion, prompting the new contingency.
• Under the fiscal framework, the zero-deficit target allows a tolerance of up to 0.25% of GDP, roughly R$31 billion.
• Compared with the prior bimonthly report, there is a net release of R$644 million due to cancellations of earlier blocks.
• Detailed allocations by ministry will appear in the Budget and Financial Programming Decree on Nov. 30, triggering a five-business-day period for agencies to indicate affected programs.