The blueprint sets a 2027 primary result equivalent to 0.5% of GDP, which the government translates to about 73 billion reais, or $14.1 billion. Officials expect a primary balance of 83.4 billion reais, and the rules let them carve out expenditures totaling as high as 65.7 billion reais - covering court-ordered liabilities and certain defense, health, and education items - which would leave an effective result of 18.6 billion reais. The proposal is intended to showcase stricter fiscal management ahead of the October vote, as polls currently put President Luiz Inácio Lula da Silva in the lead.
Finance Minister Dario Durigan has worked to soothe market worries about the fiscal path before the election, emphasizing a gradual improvement in public finances. After meeting Lula to finalize the plan, he told reporters, "We are talking about an administration that is committed to the people." Even so, investors have been paying closer attention to Brazil's nominal shortfalls - now close to 10% of GDP - and to mounting public debt, and are probing how policy might take shape if Lula secures a fourth term, including whether he would embrace tighter caps on spending growth after the vote.
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According to Durigan, the plan fixes the 2027 minimum wage at 1,741 reais, versus 1,621 reais in the current year, and he said the budget can absorb the associated pension and social-benefit indexation while still delivering a surplus. Lawmakers have also aided the effort by approving measures that introduce triggers to slow the growth of mandatory outlays, a change projected to cut spending by roughly 10 billion reais next year. The budget also opens the first chapter of the shift to Brazil's revamped consumption tax regime, counting expected receipts from the Contribution on Goods and Services (CBS) and from the Selective Tax created by the tax overhaul. Mandatory items are projected to account for a slightly smaller portion of primary outlays, standing at 91.7% in 2027 compared with 92.4% in 2026.
