Senate Moves Forward With R$45–56 Billion Fiscal PLP

Overview

• Senator Eduardo Braga presented a revised PLP on Thursday that raises the estimated fiscal impact to R$45.1 billion–R$56.1 billion and preserves targeted exemptions for technology, semiconductors and disability vehicle benefits.
• The measure would let the federal government cap real growth of primary spending at 2% in years when spending freezes are triggered, expand contingenciamento (explicit budget freezes to hit fiscal targets) and restrict some tax benefits to raise revenue.
• Senate President Davi Alcolumbre sought an immediate vote and the government’s congressional leader Randolfe Rodrigues warned the pro‑government bloc would oppose attempts to delay consideration, with leaders negotiating protections for constitutionally protected programs such as the health floor.
• Markets reacted positively on Thursday with the real strengthening, futures rates falling and equities rising, but investors signaled caution about the package’s modest size and the government’s capacity to implement it and choose an effective economic team.
• Parallel to the fiscal push, the Supreme Court extended the PF inquiry into Senator Ciro Nogueira by 60 days and the Rio prosecutors’ Operation Charon led to arrests and asset seizures tied to Refit and an alleged R$14.7 billion ICMS debt, developments that are increasing political strain and could affect legislative momentum.