Brazilian Government Projects 2027 Budget Surplus Amid Rising Public Debt

Planning and Budget Minister Bruno Moretti stated that the proposed 2027 Budget will project a surplus even when including expenses currently excluded from fiscal target calculations. The government is scheduled to deliver the budget for the first year of the next presidential term to Congress on Monday, proposing a fiscal target surplus of R$ 73.2 billion, which represents 0.5% of the Gross Domestic Product. Minister Moretti noted that the government will not need to submit projects to increase revenue to meet this target, unlike in previous years. He attributed part of this fiscal space to a limit on personnel spending growth of 0.6%, the floor provided by the fiscal framework. The proposed budget also includes a minimum wage of R$ 1,741 for 2027. Meanwhile, broader economic data indicates that public debt has risen 11 percentage points during President Lula's term, with one report noting it rose from 66% of GDP in 2016 to 82% this year. The International Monetary Fund has warned that Brazilian liabilities could soon exceed 100% of GDP. Recent data shows a primary deficit of R$ 55.3 billion in June, while federal revenue reached a record R$ 289 billion in July.