Brazilian Congress Approves 2026 Budget Guidelines With Early Amendment Payout Mandate

Overview

• In a symbolic joint vote, lawmakers passed the LDO and sent it for presidential sanction, clearing the way for the 2026 budget vote targeted for mid-December.
• The law obliges the Executive to pay at least 65% of individual and bancada amendments and special transfers (emendas PIX) by the end of the first semester of 2026, a shift that strengthens Congress in an election year.
• The central government’s primary target is set at a R$34.3 billion surplus (0.25% of GDP), with explicit authorization to base contingencies on the floor of the fiscal interval rather than the center.
• Up to R$10 billion in expenses by state-controlled companies are excluded from the estatais’ primary result to accommodate Correios’ restructuring, and a clause allowing the central government to offset estatais’ overruns was removed at the Executive’s request.
• Other provisions include minimum values for emendas PIX (R$200,000 for works and R$150,000 for services), shorter analysis deadlines for individual amendments, and protection for party and electoral funds from contingencies with Fundo Partidário correction from a 2016 base.