The Finance Minister, Dario Durigan, announced this Tuesday, the 27th, that the federal government will present a bill to the National Congress. This project aims to clearly establish that the government will seek to reach the center of the fiscal target in 2027.
By adopting this centered approach, the government will have to implement more significant resource cuts over the next year, which implies expense containment across various ministries. The main objective of this initiative is to restore the confidence of the financial market, which faced major instability on Monday, the 26th, after the confirmation of President Luiz Inácio Lula da Silva's (PT) re-election over the weekend.
Durigan stated that after the election, the president will define his team, and this team, in turn, will present the necessary measures for adjustment and pursuit of the target, demonstrating the government's commitment to fiscal responsibility. He also mentioned that the economic team is developing other actions to strengthen belief in future public finance results, although he did not detail what they are.
Market Instability
Durigan explained to journalists that the intense pressure observed in the financial market on Monday resulted from President Lula's re-election for the next four years, classifying it as a 'reaction to a change in position.' He emphasized that there was a change in expectation because the market was betting on a different candidate, but President Lula achieved a historic victory on Sunday, which naturally generated disorder in the market.
The minister expressed hope that a 'level of rationality' would be maintained in the financial market, meaning avoiding large fluctuations in asset prices such as stocks, the dollar, and future interest rates. Durigan assessed that the markets are already showing greater calm currently, citing that the exchange rate began to yield in the morning, indicating an entry into a period of rationality, without, however, stipulating price limits.
Fiscal Target
According to current regulations, there is a tolerance margin of 0.25 percentage points, which sets the floor of the band at a surplus of R$ 36.6 billion. Additionally, government spending on precatórios—which are judicial decisions—and on projects in the areas of defense, health, and education can be excluded from this rule, constituting exceptions to the spending limit approved by Congress in recent years.
If the fiscal target and the projection of a positive surplus for 2027 are achieved, this would represent the first positive result since 2022, the last year of Jair Bolsonaro's government. In August, when submitting the 2027 budget project to the National Congress, the government had projected a positive balance of R$ 18.6 billion for 2027, corresponding to the first year of President Lula's mandate, re-elected the previous Sunday.
