Brazil Boosts Ministry Budgets While Keeping Fiscal Goals in Check

The Brazilian government plans to lift the spending limits for its ministries, a move that will keep it within this year’s budget cap. Finance Minister Dario Durigan announced the change on Thursday, saying it will be revealed in a report scheduled for Friday at 3 p. m. local time. Durigan explained that the new spending block, currently set at 1. 6 billion reais (about $320 million), will be increased, but that a hard spending freeze is unnecessary. A freeze would only happen if officials feared the country could miss its fiscal target.

He described the adjustment as a “cut into our own flesh, ” emphasizing that while revenue has met forecasts, the government must continue trimming costs to stay on a path of fiscal stability. Brazil aims for a primary surplus equal to 0. 25 % of GDP this year, with a tolerance range of ±0. 25 %. In March, the government projected a primary surplus of 3. 5 billion reais, roughly zero percent of GDP. The move reflects a gradual approach to balancing the budget while still allowing ministries more flexibility in their spending plans.

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