Brazil’s 2027 Budget Promises a Primary Surplus of 0.1% of GDP
Brazil · FISCAL POLICY
Key Facts
- —Target The fiscal framework requires a 2027 primary surplus of 0.50% of gross domestic product.
- —Effective result Planning minister Bruno Moretti briefed a surplus of US$3.46 to US$3.85 billion.
- —Headline figure Without the legal deductions the projected surplus would reach US$14.08 billion.
- —Correios The bill should carry a US$1.15 billion capital injection into the postal operator.
- —Defence A new complementary law lifts US$481 million of defence spending outside the 2026 cap.
Ministers put the effective result at US$3.46 billion to US$3.85 billion once court-ordered debts are counted.
President Luiz Inácio Lula da Silva said the 2027 budget in Brazil will show a primary surplus of 0.1% of output. He spoke in Bahia on 28 August 2026, three days before the bill goes to Congress.
What the president actually promised
Lula spoke to reporters at a campaign event in Salvador, Bahia, on Friday 28 August 2026. He called the result small but a mark of serious management.
The budget bill, known as the PLOA or Projeto de Lei Orçamentária Anual, must reach Congress by 31 August. That deadline comes from the constitution, and the text was not yet public on Friday.
Officials describe the plan as the best projected federal result since 2015. The 2027 budget in Brazil is a forecast, however, not an audited outcome.
All dollar figures here use the central bank PTAX selling rate for 28 August 2026. That rate was R$5.2005 to the dollar.
The target, the band and the gap
The fiscal framework sets a 2027 primary target of 0.50% of gross domestic product. A tolerance band of 0.25 points sits on either side of it.
The midpoint equals R$73.2 billion (US$14.08 billion) on the government’s own output estimate. That estimate is R$14.64 trillion (US$2.82 trillion) for 2027.
For 2026 the target is 0.25%, and the band still allows a balanced result. So 2027 is the first year that legally demands a positive number.
The 2027 budget in Brazil is therefore a test of the framework itself. Any miss would land on whoever wins the October 2026 election.
The framework has been law since 2023, and its cap on spending growth runs separately. Congress has repeatedly carved single items out of both rules.
What the word effective is doing here
Bruno Moretti, the planning and budget minister, spoke to Folha de S.Paulo on Friday. He put the effective surplus at R$18 billion to R$20 billion (US$3.46 billion to US$3.85 billion).
Effective here means every expense counted, including the items the fiscal rules leave out. Those items are precatórios, the court-ordered payments, and extraordinary credits.
Strip those deductions out and the headline figure is R$73.2 billion (US$14.08 billion). The gap is the carve-outs, not any change in spending.
The effective number is not net of the tolerance band, which is a separate cushion. That band alone is worth about R$36.6 billion (US$7.04 billion).
The effective figure counts cash that actually leaves the Treasury. The headline figure is the one measured against the legal target.
Where the extra room came from
In April the guidelines bill projected an effective surplus of only R$8 billion (US$1.54 billion). The figure has roughly doubled since then.
Moretti credits the fuels complementary law, which opened about R$10 billion (US$1.92 billion) of space in 2027. Extraordinary oil revenue tied to the Middle East crisis adds more.
The Instituição Fiscal Independente, the congressional fiscal watchdog, has checked that R$10 billion estimate. It found R$5 billion (US$962 million) from capping growth in earmarked spending.
The rest comes from leaving oil and gas revenue out of the 2027 health floor. That piece is worth about R$4.7 billion (US$904 million).
July’s central government accounts, reported separately by The Rio Times, showed a monthly primary surplus. Those figures belong to the 2026 target and do not change next year’s arithmetic.
The Correios injection and the condition behind it
The 2027 budget in Brazil should carry a capital injection of R$6 billion (US$1.15 billion) for the Correios. That is the state postal operator, formally Empresa Brasileira de Correios e Telégrafos.
The money is not a discretionary favour but a contract term. Five banks lent the company R$12 billion (US$2.31 billion) in December 2025.
The Treasury guaranteed that loan, and the Union promised to reinforce the company’s cash by the end of 2027. Reporting on the contract says a failure would let creditors demand repayment at once.
Correios lost R$8.5 billion (US$1.63 billion) in 2025 and R$3.158 billion (US$607 million) in the first quarter of 2026. Its restructuring plan covers voluntary departures, branch closures and asset sales.
Officials weighed writing a smaller line into the bill and topping it up later. They also studied moving part of the money forward into 2026.
The defence carve-out signed on 27 August
Lula signed Lei Complementar 235 on 27 August 2026, published in the Diário Oficial da União the next day. It is a complementary law, not a decree or a provisional measure.
Its Article 12 amends Lei Complementar 221 of 18 November 2025, the defence spending law. That earlier law shields up to R$5 billion (US$962 million) a year for six years.
The new text adds up to 50% more for 2026, or R$2.5 billion (US$481 million). That money sits outside both the spending limit and the 2026 primary target.
Whatever is committed under the clause is deducted from the defence limit for 2028. The law names strategic national defence projects, and does not list them.
The spending must be capital spending and must support the defence industrial base. Congress passed the measure on 12 August inside a bill about fuel taxes.
Lei Complementar 221 allowed 60% extra in 2025, which was then charged back to 2026. The 2026 addition works the same way, with 2028 carrying the cost.
What the watchdog and the ministers say next
The Instituição Fiscal Independente warns that pulling expenses out of the count weakens the rule. It has called for a deep review of the fiscal regime in 2027.
Dario Durigan, the finance minister, says the package carries brakes on mandatory spending. He cites a payroll rule that caps real growth at 0.6% if 2026 ends in deficit.
The 2027 budget in Brazil also assumes a minimum wage of R$1,741 (US$335). That is 7.4% above the current R$1,621 (US$312).
Financial market specialists are waiting for the bill, which the government hopes will anchor expectations. The detail will sit in the revenue tables filed with the text.
Congress will now amend the text, and the final vote usually lands in December. The 2027 budget in Brazil will be executed by the government elected in October.
Frequently Asked Questions
Does the 0.1% figure match the official target?
No. The framework target for 2027 is 0.50% of gross domestic product, with a band of 0.25 points. The 0.1% the president cited is the effective result, after court-ordered payments and extraordinary credits.
What is the Correios money for?
It is a capital injection of R$6 billion (US$1.15 billion) promised under a 2025 loan contract. Five banks lent R$12 billion (US$2.31 billion), and the Union agreed to reinforce the company’s cash by the end of 2027.
Which instrument moved defence spending outside the cap?
Lei Complementar 235 of 27 August 2026, published the following day. Article 12 adds up to R$2.5 billion (US$481 million) for 2026, to be deducted from the 2028 defence limit. The 2027 budget in Brazil is a separate document and carries no such clause.
Connected Coverage
Sources
- www.planalto.gov.br
- www.planalto.gov.br
- www.metropoles.com
- www.metropoles.com
- www.metropoles.com
- www12.senado.leg.br
- www.camara.leg.br
- www.camara.leg.br
- www.camara.leg.br
- www.forte.jor.br
- www.cnnbrasil.com.br
- diariodocomercio.com.br
- www.brasil247.com
- istoedinheiro.com.br
- www.folhape.com.br
- www.congressoemfoco.com.br
- www.canalrural.com.br
- www.riotimesonline.com
- olinda.bcb.gov.br
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
Read More from The Rio Times