Lula’s government foresees zero deficit in 2024, according to budget law sent to Congress

The Brazilian Government sent Congress the budget forecast for 2024, in which it plans a zero primary deficit in 2024 and a surplus in 2025, which was officially reported this Friday.

The official estimates are contained in the Budget Guidelines Bill sent this Friday to Congress by the Government of President Luiz Inácio Lula da Silva and published this Friday in the Official Gazette of the Union.

As anticipated by the Minister of Planning and Budget, Simone Tebet, the project still considers the so-called ceiling on public spending in force since 2017 and that Lula’s Government wants to replace it with a new fiscal framework with greater flexibility to expand public spending.

According to the draft, the forecast of zero deficit in 2024 is accompanied by an estimate of a primary surplus in 2025 of 61.6 billion reais, about US$12.5 billion.

The document establishes the guidelines and goals for the following year, shaping the Budget proposal to be discussed in the year’s second half.

According to the Ministry of Planning, these forecasts will have to be altered with more fiscal space if the new mechanism of spending, deficit, and investment rules is approved, as the government considered the growth of 2.3 percent in the Gross Domestic Product (GDP), with an estimated inflation of 3.5 percent per annum next year.