Brazil & Southern Cone - August 2024

BRAZIL | Government announces budget freeze. On 15 July, Finance Minister Fernando Haddad announced a R$15bn (US$2.7bn) budget freeze to ensure the Brazilian government meets its fiscal targets for 2024. The government has established an ambitious zero-deficit target for the year, but its latest forecasts show the projected deficit pushing the 0.25% tolerance range. Of the total budget freeze, R$3.8bn have been blocked due to lower-than-expected revenue and could potentially be reversed later in the year if, for example, the government resolves an impasse over payroll tax exemptions. The details of the budget freeze were outlined later in July; all ministries bar the environment ministry are affected, with the health ministry and the ministry of cities taking the biggest hit, with a R$4.4bn and R$2.1bn freeze respectively, followed by the transport ministry (R$1.5bn) and the education ministry (R$1.2bn).  

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