Brazil Posts $9.5 Billion Surplus as Revenue Climbs, Spending Falls
Brazil’s central government achieved a R$54.2 billion ($9.51 billion) primary surplus in the first two months of 2025, the Independent Fiscal Institution (IFI) reported on Thursday.
This figure more than doubles the R$21.2 billion ($3.72 billion) surplus recorded during the same period last year, marking a significant fiscal improvement. Primary revenues grew by 3% in real terms during January and February compared to 2024.
The federal government’s net revenue increased by 3.5% after deducting transfers to states and municipalities. Administered revenues jumped by 3.9% while social security contributions rose by 2.7%.
Primary expenditures simultaneously decreased by 5.1% in real terms. This reduction stems partly from the year starting without an approved budget. Additionally, the government avoided repeating last year’s large February payment of backed-up court-ordered settlements.
Several spending categories still showed growth despite overall expenditure decline. Social security benefits increased by 2.3%, unemployment payments rose by 4.4%, and the Continuous Cash Benefit program jumped by 13.5%. Meanwhile, personnel expenses fell by 2.8%.
The IFI projects net revenue will reach 18.3% of GDP by year-end, greatly supporting the government’s primary result target. However, spending containment measures approved last December haven’t yet shown noticeable effects on expense trajectories.
Brazil’s Fiscal Target for 2025
Brazil operates under a fiscal framework requiring a zero primary deficit for 2025. This target allows a 0.25% of GDP tolerance margin, approximately R$30.97 billion ($5.43 billion). Experts consider this goal achievable with proper management.
The IFI believes the government can meet its target with modest flexibility. Success requires implementing at least R$18.6 billion ($3.26 billion) in budget freezes and R$15.7 billion ($2.75 billion) in resource pooling by December. These fiscal management efforts remain crucial as Brazil balances growth initiatives with sustainable debt levels.
Public debt concerns persist despite positive short-term results. Brazil must continue strengthening fiscal discipline while addressing competing social and economic priorities. The government faces challenging decisions throughout 2025 to maintain this early positive momentum.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
LatAm Markets: Live Signals → — real-time movers, turnover leaders and FX across Latin America.
Read More from The Rio Times