BRASILIA (Reuters) – Brazil’s budget bill now foresees a primary surplus of 15 billion reais ($2.66 billion) for the central government this year, a version presented early on Thursday by its sponsor in Congress showed, up from the 3.7 billion reais proposed by the government.
The text by Senator Angelo Coronel, set to be voted on later on Thursday in a joint budget committee before heading to a full congressional session, states that revenue projections were revised upward, leading to an improved primary balance forecast.
President Luiz Inacio Lula da Silva passed a new fiscal framework in 2023, his first year in office, which combines a primary balance target with a cap limiting spending growth to up to 2.5% above inflation.
For this year, the target is a zero primary deficit, with a margin of 0.25% of gross domestic product (GDP), meaning the government can post a deficit of 30.9 billion reais and still comply with the rule.
The senator said he incorporated changes requested by the federal government, including higher spending on social security benefits and a reduction in expenditures on the Bolsa Familia welfare program, which provides monthly cash transfers.
Traditionally, the annual budget bill is approved before the end of the preceding year. This year’s significant delay underscores the challenges faced by Lula’s leftist administration in its relationship with Congress.
($1 = 5.6486 reais)
(Reporting by Marcela Ayres;mEditing by Kirsten Donovan)
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