Brazil's Finance Minister Proposes Fiscal Adjustments to Target Midpoint of Budget Goal

Brazil's Finance Minister Dario Durigan announced Tuesday he will propose changes to fiscal rules to target the midpoint of the official goal, pending Congressional approval. The proposal would allow the economic team to expand budget contingency measures. Currently, budget contingency targets the minimum of the goal, but the new plan would pursue the center while maintaining the existing 0.25 percentage point tolerance band. Durigan stated legislative measures will be presented to ensure legal clarity on pursuing the central target. The 2026 goal is a primary surplus of 0.25% of GDP, about R$34.3 billion. The government projects a R$80.9 billion deficit for 2025 and estimates a R$13.6 billion shortfall to reach the goal's floor, prompting a contingency of that amount.