Brazil’s government will maintain its fiscal framework through spending controls and revenue recovery if President Luiz Inacio Lula da Silva wins reelection in October, Finance Minister Dario Durigan said on Thursday.
The administration has already implemented a fiscal effort equivalent to 2% of GDP and is prepared to match that magnitude in the next term. Durigan highlighted ongoing institutional dialogue with Congress as the driver of adjustments, including mandatory spending cuts of around 10 billion reais ($1.9 billion) scheduled for 2027.
Separately, Brazil’s central bank reduced its benchmark interest rate by 25 basis points for a fourth consecutive meeting, bringing the Selic rate to 14.00%. The bank left its next policy steps open, signaling continued caution amid fiscal and inflation dynamics.
Durigan emphasized the need to sustain spending reductions and broaden the revenue base in a manner balanced for the population, aiming for a positive fiscal outcome as early as next year. The government’s approach combines expenditure restraint with efforts to restore revenue streams, reinforcing the current fiscal framework regardless of electoral outcomes.
