*Brazil’s government has submitted to congress the Projeto de Lei de Diretrizes Orçamentárias (PLDO) for 2025, the draft legislation to set the budget guidelines for next year. The government has set a zero-deficit target for 2025, while it will aim for primary surpluses of 0.25% of GDP in 2026, 0.5% of GDP in 2027, and 1.0% in 2028. When the government presented its bill to establish a new fiscal framework, which was approved in August last year, the 2025 primary surplus was projected to be 0.5% of GDP and the 2026 surplus was expected to be 1.0% of GDP. The lower targets set in the 2025 PLDO reflect a drop in optimism from last year regarding the government’s ability to raise revenue. Speaking to the press last week, Finance Minister Fernando Haddad said that the government has faced obstacles to its economic agenda in recent months, citing as an example, resistance in congress to the imposition of payroll taxes, among other tax-related initiatives that have faced challenges.
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