LatinNews Daily - 31 January 2025

*Brazil’s national treasury has reported that the federal government’s primary deficit for 2024 came to R$43bn (US$7.35bn), down from the annual deficit of R$228.5bn in 2023. The treasury’s latest fiscal report puts annual net revenue at R$2.16trn, up 8.9% in real terms from 2023, while annual expenditure totalled R$2.20trn, down 0.7% on the previous year. However, this is unlikely to dispel market concerns over the tendency of the government under President Luiz Inácio Lula da Silva to spend more money than it earns. According to Article 2 of the 2024 budget guidelines law, the government must aim for zero deficit but the tolerance range allows for a primary deficit of up to R$28.76bn. Even though R$43bn is above the limit, reports in the national media suggest that the Lula administration has technically met the target due to legislation passed last year to exempt some extraordinary expenditure from the fiscal limit, such as the federal funding for efforts to rebuild infrastructure in the state of Rio Grande do Sul, which was devastated by severe flooding and storms in April-May 2024.