(Bloomberg) -- Brazil’s government expects to make a “true spending review” in the second half of next year with a focus on achieving its 2026 fiscal target, according to Planning Minister Simone Tebet.
The economic team halted a currency rout in July by announcing 25.9 billion reais ($4.6 billion) in 2025 spending cuts. Investors have demanded a more substantive plan on spending reductions that will have a deeper impact on Brazil’s fiscal trajectory, instead of a focus on generating new revenue like in 2024.
President Luiz Inacio Lula da Silva “has authorized us to cut 25.9 billion reais,” Tebet said Saturday in a panel held at Expert Week in São Paulo. “This is enough to bring the fiscal deficit to zero next year, but it won’t be enough for 2026.”
Tebet said 2023 and 2024 were marked by the “recomposition of the tax burden,” adding that increasing revenue as a source to meet the fiscal target is running out.
The minister also said the federal government won’t change next year’s fiscal goal. The spending review will include measures to “integrate public policies” and an examination of subsidies to check which ones are most in the public interest, she said.
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