Politics · Brazil · 1 hr ago
Lula team prepares fiscal proposal to target the middle of Brazil’s goal
Lula’s economic team is preparing a constitutional proposal that could let Brazil’s next government aim for the middle of its fiscal target.
The proposal would also allow it to freeze more budget funds if needed to improve the path of public debt.
The plan is not yet set for formal submission; that depends on Lula and the make-up of his incoming government, including its economic leaders.
The team also wants to slightly increase the 18.6 billion reais primary surplus set out in the proposed 2027 budget, though it has not said how.
The government is weighing slower growth in subsidized lending, which expanded during Lula’s current term and can sit outside key fiscal limits.
The steps are meant to reassure financial markets after concerns about rising spending, while the government also plans to fit campaign promises for new or expanded benefits into the 2027 budget.
Lula’s team is preparing a constitutional amendment proposal to let the next government pursue the center of Brazil’s fiscal target.
The proposal could also allow more budget funds to be frozen if needed to improve the public-debt trajectory.
The team is considering other measures, including reviewing mandatory spending and slowing subsidised lending.
The formal submission of the proposal depends on Lula’s decision and the composition of his new government.
The team also aims to modestly increase the primary surplus projected in the 2027 budget.
- Who
- President Luiz Inácio Lula da Silva’s economic team is preparing the proposal.
- What
- A proposed constitutional amendment would let the government pursue the center of the fiscal target and freeze more budget funds if needed.
- When
- The proposal is being prepared ahead of Lula’s next term; formal submission depends on later decisions.
- Where
- Brazil.
- Why
- To improve the trajectory of public debt and signal commitment to fiscal balance.
Lula’s campaign promises
Lula’s economic team
Spending and tax relief
Lula’s campaign promises
The campaign included promises to increase spending and grant tax relief.
Lula’s economic team
The team aims to accommodate spending in the 2027 budget while also increasing the effective surplus.
Fiscal policy
Lula’s campaign promises
The campaign promises ran counter to balancing public accounts.
Lula’s economic team
The team is preparing measures to pursue the center of the fiscal target and improve the debt trajectory.
Datafolha projected that Lula had been re-elected, according to the article.
Lula is expected to consider the measures prepared by his current economic team.
- Proposed measure
- Constitutional amendment to pursue the center of the fiscal target
- Budget year
- 2027
- Projected primary surplus
- R$18.6 billion
- Possible economic team candidates
- Gabriel Galípolo, Dario Durigan, Camilo Santana, Renan Filho and Rafael Fonteles