TCU warns of R$ 409 billion shortfall in Brazil's 2027 Golden Rule compliance

The Brazilian Federal Court of Accounts (TCU) has identified significant transparency flaws in the 2027 Budgetary Guidelines Bill (PLDO). A primary concern is a projected R$ 409 billion shortfall in meeting the ‘Golden Rule’, a constitutional mechanism that prevents the government from incurring debt to fund current expenses, such as personnel costs and social benefits.

The TCU reported that the projected insufficiency for 2027 is high and expected to persist in subsequent years, indicating the government will face difficulties complying with fiscal norms. Additionally, the court noted a lack of detailed information regarding the trajectory of public debt, insufficient explanations for R$ 65.7 billion in tax deductions, and a lack of traceability for R$ 21.17 billion intended for ongoing investments.