The federal government budget is not now a stone in the economies. However, the pride was higher since Tuesday (15) with the budget guideline bill (PLDO) to 2026.
Some budget expectations are seen as “very optimistic” by economists who have heard by CNN. But what bothered him is the negative projection of the government in terms of estimated expenditures – those that are not mandatory, in short, investments.
Budget resources that are not taken according to mandatory expenditures (associated with the benefits are not required for these expenses, such as those related to education and health; etc.) or parliamentary amendments.
For 2026, PLDO expects 1.5 % of the Brazilian GDP (or 208.3 billion dollars) in free spending, indicating 17.4 % of GDP (or 2.385 trillion USD) to mandatory.
In 2029, expectations are that mandatory expenditures rise at $ 2.838 trillion, 16.8 % in GDP. On the contrary, The estimated expenses must decrease approximately 200 billion Rangeette, to 8.9 billion dollars, by 0.1 % of GDP by 0.1 %..
Felipe Salto, chief economist and Warren Instuminus partner, pointed out Ww The “basic deficit is just a small part of the problem”, while increasing the country’s interest in the country on the country’s nominal deficit.
Spend by pressing investments
Tiago SBARDELOTTO, an economist at XP, explains in a statement that this movement occurs because, since 2027, all spending should be included in eliminating the payment of federal government debts – in spending the target and taking place for estimated expenses, which decrease by 41.3 %.
In the observation, the economist notes that, it is still outside the spending limit, the exact expenditures will reach a new record. By 2026, about $ 115.7 billion of judicial and implicit rulings, of which 55.1 billion dollars in the primary goal, prompted the government to reach a deficit of 0.9 % of GDP next year, according to XP estimates.
“In 2026, reaching a zero deficit in 2026 will require additional revenue.
“Most importantly, this bottleneck should lead to a change in the financial frame after the 2026 elections,” he indicated.
In the April Financial Monitoring Report (Aprom), the Independent Financial Corporation (IFI) warns that The tax framework – Al Qaeda to control the increase in spending set by the government without itself – has not been able to fulfill its role.
And he said to Cnn money Alexander Andradi, IFI manager.
The new financial framework ends the ceiling of spending – a base that has been adopted by the Michel Timier government. Since then, government expenses can grow between 0.6 % – in periods of decline – and 2.5 % – at expansion times – higher than the revenue of the previous year and inflation.
Inside the band, spending Up to 70 % of revenue variation in the previous year.
The important point is that with the base, mandatory expenses were high, at a faster pace than permitted in the tax frame, to take the allowable space.
Felipe Salto notes that the situation for 2025 is “already more or less equal”, because the government may fulfill the goal of the Safari financial deficit, albeit in the lower band of tolerance.
The problem begins in 2026, when the government offers a financial surplus 0.25 % of GDP and Warren a 0.8 % deficit.
“What the government will have to do is to change the financial goal, (…) in August (when the budget is presented) Ww.
“The financial amendment to be valid from 2027, you need a list of measures. If you do not commit it, forget about it. There will be no framework, ceiling spending, and the best base in the world solve this problem.”
Optimistic government, pessimistic reality
According to PLDO, the total public government debt should reach peak by 2028 and 84.2 % of GDP, then decreased until it reaches 81.6 % of GDP by 2035.
no WwSalto pointed out that Brazil’s debt is about 80 % of GDP is about 13 degrees Celsius higher than the group of emerging countries group.
What economists also refer is that government expectations do not confirm the next reality.
“Debt forecast appears optimistic,” says SBARDELTTO.
“The difference may be due to the hypotheses related to the current initial result (we expect only a surplus of 2029), the growth of average GDP (assumes average 2 %) and the interest rate (we consider 9.5 % in the case of promotion),” wonders.
Alexander Anderi contemplates this while Some spending – especially social security – is underestimatedEstimation of recipes has been exaggerated.
“We have a more conservative position regarding the embodiment of these recipes because they have many uncertainty,” says IFI director. The government ends with the dismantling of the spending targets from 2026, ascending Not following estimates that are in line with the economists ’project.
However, it is important to emphasize that the image is not an argument, because the national treasury still has a strong box and that the demand for government bonds is fixed.
“What is the problem, then? It is the high level of expenses, the poor quality of the expenses and the budget system that entered into the pilot tour. Is someone against health spending and education? No, but how does he do?
“My bet is that he will face, not now. But the government it takes will need a plan for public accounts,” he said.
solution
Gustavo Cruz, the chief strategy in RB Investmentos, indicates that mandatory expenditures have acquired 90 % of the budget area for a long time. Her evaluation is that there will be no big difference between the election of “the president” or “b” because there is a small space for maneuvering resources.
The solution will be to fix a structural.
“All this is very limited, less and less. For more than 10 years, we have discussions about the need to discuss spending, a tax reform not only to increase revenues, but discuss spending because there is no additional space,” Cruz notes.
Despite the difficulty of pressure of mandatory expenditures in the short term, Salto believes that “the way out of this trap is to solve this structural problem of the spinning spending.”
Among the possibilities that list, the economist indicates the need for:
- Change the constitutional association of health and educational spending;
- Changing the minimum wage: policy can be preserved, but not as an indicator of public spending, yes as a labor market policy.
But here, it also draws attention to the parliamentary modifications. Looking at Congress, the economist “Farinha Pouca, the first piraau”.
“They managed to seal the continuous growth of (modifications) as if the country did not need anything else,” Warren said, noting that this is poor quality expenses due to the way to spray and trust with its implementation, unlike the long -term structural investment.
“Congress must put his hand in consciousness.”
Refer to the five signs that Brazil’s public accounts are at risk
