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Brazil fiscal adjustment plan and widening deficit

Updated 3 times since CLSTR started tracking revisions of this situation.

What changed

2026-07-31 15:12 UTC → 2026-07-31 16:26 UTC · added removed

Finance Minister Dario Durigan reaffirmed the goal of a two‑percentage‑point‑of‑GDP fiscal adjustment, aiming for targeting a primary surplus by 2028‑29 and a modest surplus by 2027, 2027 while protecting social programmes and relying on higher oil royalties. He also noted a recent R$5.7 billion cut in the 2026 budget block and ruled out new capital‑control measures. Nevertheless, the fiscal gap continued to expand. The consolidated public‑sector primary deficit for June 2026 rose to widened, reaching R$55.3 billion, billion in June 2026, up from R$47.1 billion a year earlier, and the nominal deficit for the month reached R$166 billion. earlier. Over the 12‑month period ending 12 months to June, the nominal primary deficit totaled R$1.31 trillion, equivalent to 9.99 R$157.2 billion (≈1.19 % of GDP, while GDP). Including interest payments of R$110.7 billion, the primary nominal deficit stood at about 1.19 for June was R$166 billion and the 12‑month nominal deficit R$1.31 trillion (≈9.99 % of GDP (≈R$157 billion). Gross GDP). Net public debt rose to 81.9 68.5 % of GDP (≈R$10.8 trillion) and net gross debt to 68.5 81.9 % of GDP. Interest payments surged costs climbed to R$110.7 billion in June, driven by higher rates an average 12.68 % per year, the highest since 2016, and a currency‑swap foreign‑exchange swap loss of R$9.3 billion. The central government contributed a primary deficit of R$47.2 billion, with regional governments and state‑owned enterprises adding R$6.6 billion and R$1.5 billion respectively. The data were released by the central bank. added to fiscal pressure. Durigan emphasized that the debt‑to‑GDP ratio remains a “last‑mile” challenge, expected to improve after 2030 as petroleum royalties increase.

Versions

  1. 2026-07-31 16:26 UTC Brazil fiscal adjustment plan and widening deficit
  2. 2026-07-31 15:12 UTC Brazil fiscal adjustment plan and widening deficit
  3. 2026-07-31 15:12 UTC Brazil fiscal adjustment plan and rising deficit
  4. 2026-07-31 13:53 UTC Brazil fiscal adjustment plan and rising deficit

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