Overview

• The court’s acórdão says adopting the tolerance floor instead of the target center to authorize commitments and financial flows is incompatible with the fiscal legal regime and will be communicated to the Planning Ministry.
• The government’s latest bimonthly report projects a 2025 primary deficit of roughly R$30.1–R$30.2 billion, near the lower bound of about R$31 billion.
• If the interpretation prevails, reports indicate the government may need to raise revenue or impose a new budget freeze to align execution with the center of the target.
• The 2025 contingenciamento began at R$31.3 billion, later saw R$20.6 billion released, and now stands near R$12.1 billion after the most recent revision.
• The TCU also identified gaps in the 2025 LDO that risk pushing discretionary spending below a minimum level, while the legal calculation excludes R$43.4 billion in precatórios, leading the Executive to estimate a ‘real’ deficit near R$73.5 billion.