Brazil Approves Delayed 2025 Budget with $2.63 Billion Surplus Target

The Brazilian Congress approved the 2025 budget on Thursday, March 20, after a three-month delay. The approved budget targets a primary surplus of R$15 billion ($2.63 billion), significantly higher than the initial R$3.7 billion ($649 million) proposed earlier by the administration.

Lawmakers authorized total expenditures of R$5.7 trillion ($1 trillion), with R$2.2 trillion ($386 billion) falling under Brazil‘s fiscal framework spending cap. The congressional approval increases expenses by R$11.9 billion ($2.09 billion) compared to the government’s original draft, reflecting shifting priorities and economic projections.

Senator Angelo Coronel presented the proposal, which relies on more optimistic revenue forecasts. The budget aims to strengthen fiscal credibility for President Luiz Inácio Lula da Silva’s administration while tackling ongoing economic challenges.

The projected surplus aligns with the government’s zero-deficit target established in the Budget Guidelines Law. Health funding received a substantial boost of R$24.4 billion ($4.28 billion), partly due to requirements that half of individual parliamentary amendments go to the sector.

The sports and leisure budget increased six-fold from the initial R$435 million ($76.3 million) proposal, while urban development funding tripled from R$2.8 billion ($491 million).

The budget makes notable adjustments to major programs. The Bolsa Família social program faces a R$9 billion ($1.58 billion) reduction compared to 2024 levels.

Strategic Shifts and Economic Projections

The Growth Acceleration Program (PAC) receives R$60 billion ($10.53 billion), representing a R$13.1 billion ($2.3 billion) increase from last year. The government recently requested congressional approval to reallocate nearly R$40 billion ($6.9 billion) within the budget.

This reallocation reduces Bolsa Família funding while increasing pension benefits by R$8.3 billion ($1.46 billion) and cooking gas subsidies by R$3 billion ($526 million).

Economic projections underpinning the budget include 2.64% GDP growth and 3.3% inflation for 2025. The SELIC basic interest rate is expected to reach 9.61% by year-end. However, some analysts project it could climb to 15% by mid-year as monetary policy remains restrictive.

The budget now awaits presidential signature before implementation. Federal agencies have operated under tight spending constraints during the approval delay, following the “duodecimo” rule that limits monthly expenditures.

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