Brazil’s Finance Minister Announces Fiscal Target Bill, Urges Market Calm

Brazil's Finance Minister Dario Durigan announced Tuesday the government will send Congress a bill to formally commit to hitting the center of the 2027 fiscal target, potentially requiring larger budget freezes that limit ministry spending. The move aims to restore market confidence after Monday's turbulence. The announcement follows President Luiz Inácio Lula da Silva's reelection, which triggered investor repositioning and market volatility. Durigan said other adjustment measures for 2027 are being studied and called for market "rationality," noting the currency was already stabilizing Tuesday morning. The 2027 central target is a primary surplus of R$73.2 billion, or 0.5% of GDP, with a tolerance margin allowing as low as R$36.6 billion. Achieving it would mark Brazil's first positive fiscal result since 2022, though R$64.7 billion in court-ordered payments and certain projects may be exempted.