Brazil, the largest economy in Latin America, has announced a significant budget cut of R$25.9 billion ($4.6 billion) for 2025. This decision is crucial for meeting the targets set by President Luiz Inácio Lula da Silva’s new fiscal framework. Finance Minister Fernando Haddad made the announcement, emphasizing the government’s commitment to achieving fiscal targets and adhering to the new fiscal law.
The government reviewed the projected public policy expenditures for 2025 to achieve a zero deficit, with expected tax revenue growth in the plan. The announcement followed President Lula’s comments on the recent dollar rise against the real, attributed to market speculation. The new fiscal framework, approved last year, allows for more state investment under specific conditions.
Brazil Announces Significant Budget Cuts for 2025
Lula’s fiscal rule ties public spending growth to fiscal revenue growth, ensuring that spending remains slightly less than revenues. With escalating expenses in Social Security, healthcare, and the Continuous Cash Benefit (BPC), Brazil faces mounting fiscal pressures, prompting calls for a revision of spending practices.